Ethereum: Is the Merge underrated or is it priced in?

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  • GlobalBlock analyst Marcus Sotirio talks about the Ethereum merger, its benefits, and the potential risks of the event.
  • He says the 99.95% reduction in yield factor and energy use allows DeFi to thrive and catalyze investor interest.
  • But it is a ‘complex technical phenomenon’ which is a,

Is Merge Underrated or Worth It? According to crypto analyst Marcus Sotirio, this could be an important question for investors as crypto could be a crucial week for crypto.

The countdown to Ethereum (ETH)’s most anticipated event – the merge – has been reduced to hours. And despite the price hovering below $1,750 after last week’s drop, optimism is still high that the major event will be successful.

or will,

Is it undervalued or is it worth it?

We saw an uptick in ETH prices in the days following the announcement of the merge date, before gaining momentum with the rest of the crypto market.

But the price continues to struggle, currently hovering around $1,730 since last week’s drop. For investors, one question to consider going into the event is whether the ETH merger is already priced in or if the market has overestimated its potential impact.

Here’s something to remember about mergers.

the gain

Digital Asset Broker Analyst Sotiriu globalblockSays there is no doubt in the merger”Most impressive event ever in the crypto industry,

Changes have advantages. For example, a 99.95% reduction in network energy usage bodes well for the ESG narrative. Basically, it helps to remove one of the barriers to increased institutional interest in ETH and the wider ecosystem – concerns over crypto mining and its energy consumption.

Analysts believe another long-term impact is the nearly 5% return for ETH investors and its impact on the broader DeFi space. Knowing how to price risk based on returns will benefit not only retail DeFi, but institutional investors as well.

“Institutional investors love cash flow,” he said in the note, “so being able to get an attractive yield is another attractive advantage that could make ETH more investable for them.”

A ‘complex technical event’ – rewarding but with risks

Many investors see Ethereum’s transition from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) mechanism as a positive event that will take place this time after several delays.

However, Sotirio cautions that when the Beacon Chain merges with the Ethereum mainnet, it may not be smooth sailing all at once.

Some observers say an unexpected delay, or some other technical hurdle that made the switch messy, could still pop up and frustrate investors. If multiple validators fail to update their software in a timely manner and are therefore not ready for a new chain, or if certain APIs are “breaking down in ways many people can’t anticipate,

Sotirio explains the risks as follows:

,Merge is such a complex technical phenomenon that it doesn’t just center around a large company, but an entire decentralized network, so there are reasons why it can’t run so smoothly.,

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