Because it transforms from a Proof-of Work system into a Proof-of Stake, Ethereum Merge is one of the most important aspects of the ETH2.0 upgrade.
This upgrade’s main focus is to move from proof of work to proof of stake consensus. According to previous reports, this improvement was delayed up until the end 2022. There is no set deadline.
The world’s second-largest cryptocurrency was meant to be weeks away from the “merge” a June upgrade of its blockchain Ethereum that would make it faster, cheaper, and less power demanding, promising a meaner and cleaner crypto future.
Ethereum Merge will Help Ethereum
Messari’s senior research analyst Tom Dunleavy believes in a report titled “The Decoupling Thesis” that the Ethereum merger will likely be a major turning point in investors’ economic outlook.
The past history of the cryptocurrency market leaders Bitcoin and Ethereum had an extremely positive relationship with the US stock market. For longer durations, the correlation between the two cryptos and the Nasdaq and S&P 500 index was 40-50 percent, while for shorter periods, it was about 90 percent.
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The negative correlation between stocks and gold has been historically maintained by US government bonds and US gold. However, the negative relationship is deteriorating. Both gold and bonds fell during the market crash of 2020, just like equities.
USD/ETH trades starting at $2821. TradingView
“It’s certainly plausible that Ethereum’s highly anticipated upgrade to a proof-of-stake system could be delayed again given that this transition is highly complicated and still uncertain as to whether it can actually deliver on its promise of lowering costs and increasing transaction speeds.”
Ethereum dropped 8% between $3,215 and $2,947 in April. This day, Ethereum chief developer Tim Beiko tweeted that the June deployment was postponed while testing progressed. It has fallen 13% to $2.844 this month.
ETH will be a quasi government bond after the merger. The bond principle is the same as a bond principle: Stakers will deposit money to receive a fixed rate return. This will also cement Bitcoin’s status as a form of digital gold.
The Merge Might Push the Flippening Forward
Messari predicted that the larger crypto industry would be exempted from global markets by 2022. The market research firm predicts that different parts of the crypto industry will gain more traction.
There are still predictions about the merger boosting Ethereum to surpass Bitcoin. Noelle Acheson of Genesis Trading’s Market Analytics told Reuters the merger will bring more funds to Ethereum.
ETH trades at $2,850 with a market worth of $343.98 Billion, and Bitcoin trades at $38,200 with a capitalization of $726.69 Billion.
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