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This is the event to watch in Altcoin projects!

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The bitcoin and altcoin market collapsed dramatically in June. Therefore, a great event took a back seat. However, it is possible that it will send huge ripple effects throughout the crypto space. It is also the event to watch this year as it could end the crypto winter. This is the big Ethereum Merge event.

Why will the price of the main atcoin Ethereum skyrocket?

According to Ben McMillan, founder and CIO of IDX Digital Assets, many refer to Ethereum’s Merge as a “triple halving”. Because the issuance of ETH tokens is significantly reduced. Almost 90%. McMillan explains:

The result is a supply and demand economy that can be a powerful price catalyst. The upcoming merger is a very important milestone for Ethereum. It will make the system more scalable, secure and ultimately deflationary in terms of exports. This is a much needed update.

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Tom Dunleavy, Messari Senior Research Analyst, explains why layoffs have been reduced so drastically. According to Dunleavy, this is due to the burning mechanism, which allows you to burn more Ethereum per day in transaction fees than the number of new tokens created as a reward for staking. Dunleavy says:

With proof-of-stake (PoS), you receive rewards from the network for staking and ordering transactions on the block, including transaction fee income. Some were burned and others assigned to validators. And if there are more transactions burned than accepted in that block, the overall supply of Ethereum decreases. This is also a good thing for the price.

The merger will remove the selling pressure from the miners. Of course, this will be very positive in terms of the ETH price. Ethereum miners often sell their tokens to cover their costs. After the merger, this selling pressure will disappear. Tom Dunleavy states:

These miners sell $ 20 to $ 30 million worth of ETH every day. That’s a lot of money considering Ethereum’s market cap. You eliminate these flows when you switch from PoW to PoS.

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“Ethereum Possible To Reach $ 3,500 After Merger!”

McMillan says Ethereum could return to $ 3,500 or even higher after Merge. He also adds that some of the risk appetite has to go back into the crypto space for this to happen. In this context, he makes the following assessment:

Much depends on the macroeconomic environment. It is possible that we are beginning to see a return on the appetite for risk assets among institutional investors. I think this could happen in early September. I wouldn’t be surprised if you see Ethereum in the mid $ 3,000 or even potentially higher.

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What about Bitcoin and other altcoin projects?

“Merge’s impact will not end with Ethereum alone. Because the whole field will embrace it.” McMillan, who put forward these views, explains the reason for this as follows:

Some people point to Ethereum Merge as a potential upward price catalyst for not just Ethereum but digital assets in general.

But as things like NFTs started to gain popularity, Ethereum’s gas tariffs started to rise. Other Tier 1 Blockchains have been developed to compete with Ethereum, such as Avalanche and Solana. “Ethereum is starting to lose market share to this other blockchain that favors scalability over decentralization,” says McMillan.

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According to the co-founder of Ledn and CSO Mauricio Di Bartolomeo, with Merge, Ethereum will be much more scalable. It is also likely to start hindering competition as it will become cheaper to use. Di Bartolomeo says:

If successful, Merge will put a massive cloud on most of the competing PoS Layer-1 blockchains. Many compete with Ethereum on the basis that it is faster or cheaper to use. And when Merge occurs, it’s not necessarily true. It could be argued that it no longer makes sense to maintain these alternative 1 levels.

When will Bitcoin and Ethereum diverge from risky assets?

cryptocurrency.comIn June, the overall market cap of cryptocurrencies fell below $ 1 trillion. Many investors are guessing where the fund is. It also wants to understand when Bitcoin and Ethereum could leave risky assets.

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Dunleavy says decoupling isn’t that far, especially for Ethereum. And he claims that Merge will play a pivotal role in that. “Either Bitcoin will become a full value asset in gold 2.0 or Ethereum will become a global cyber asset,” says Dunleavy. Dunleavy says this divergence for Ethereum could stem from Merge. Because he only notes that Ethereum’s hodl and staking returns can be anywhere between 8% and 12%.

As such, Dunleavy claims that Ethereum will overtake Bitcoin this year and for years to come. He also predicts that Bitcoin will eventually reach a market capitalization of around $ 12 trillion in gold. But according to him, the potential for Ethereum is much higher.

Will the major altcoin take control of other chains?

Some even believe that with Merge, Ethereum could potentially wipe out all other blockchains. Furthermore, he thinks it will become the main network in the crypto space. Paul Brody, Blockchain Leader at Ernst & Young Global, says:

We don’t have a multi-OS future. We don’t have 20 different networking standards. If you go back 30 years, the Internet Protocol was used for the interconnection of different types of networks. Today there are no different types of networks. It’s just the internet. All development and engineering work takes place in the Ethereum ecosystem. Even though Bitcoin seems to be doing well, I’m worried about the long-term future.

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The larger ecosystem tends to gain over time, according to Brody. And the main altcoin Ethereum is the largest ecosystem. At the end of the day, Ethereum will be on top of Ethereum. Many Tier 1 contestants will have to rename themselves as Tier 2 in the next year or two.

Serious risks remain

Despite the high optimism, there is still no guarantee that Merge will be successful, according to analysts. Furthermore, there is no concrete case where it will not have negative effects that could impact Ethereum and the wider crypto space. David Duong, Coinbase’s head of institutional research, comments:

The developers have now thrown the difficulty bomb five times. But now we are. You see that the block times for the main altcoin have actually increased. It will be painful if we fail to make the union.

Duong says one of the biggest risks is the pressure to do everything technically at once. “Ethereum developers are trying to align terminal difficulty with the difficulty bomb itself so that they can merge and all at once. Not an easy task. This has never happened before. We have never seen a Blockchain change. the consent mechanism. This is very important, “he says.

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Di Bartolomeo refers to the many investors who use Ethereum as collateral, and also to the large number of smart contracts running on Ethereum. In this context, Merge warns of the risk of contamination in the event of a failure. Di Bartolomeo said: “It will probably be one of the most complex technical upgrades a cryptographic protocol has ever seen. There is so much at risk,” he says.

Another thing to watch is what will happen to Ethereum miners who profit from the PoW protocol. After all, all of these people have invested millions of dollars. Di Bartolomeo says:

This will create some confusion. Because all these miners will go out and try to mine different cryptocurrencies. They will not receive the same interest or income from another Blockchain. It is possible that this also causes some fluctuations in the computer hardware.

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