September roundup: Merge comes and goes, markets lag and macro does its thing

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Somebody woke up to Green Day, because September is about to end.

So, what happened in crypto this month? And how do we look when we turn the page to October?

bitcoin and ethereum lag

Nothing major, but Bitcoin and Ethereum have been trending downwards throughout the month. Interestingly, Bitcoin dropped more than Ethereum, which is unusual compared to the pattern we have seen historically, where Ethereum is generally the more volatile of the two.

The merge was big news, of course, as Ethereum completed the largest blockchain upgrade in history on September, The event came and went without a hitch, though the pricing didn’t do much – suggesting that its pricing was premature, as many suspected.

In the short term, the merge hasn’t had much impact with respect to price, but it would be tempting to track now that the pipeline that operates under the Ethereum ecosystem has completely changed.

I’ve written about my views before that staking yields can also serve as a “risk-free” proxy for the world of D-Fi, helping to provide a framework for valuation and more It lays the groundwork for maturation.

The groundwork should also allow for the separation of Ethereum from Bitcoin. I have long viewed bitcoin as money and ethereum as technology, and I think this move further exacerbates the duality – money requires proof of work, but is not the basis of the DeFi system. Is.

But these are long term views and in the medium term, we are still very much correlated.


Let’s jump on-chain to see any notable indicators that came to me throughout the month.

Firstly, given that Ethereum has completed the above merge, there is clearly no need for miners on the network. This is the complete opposite of ground breaking news, but it’s still nice to see the hash rate drop to zero in the chart below.

IntoTheBlock shows a neat graph below the net issuance of ETH after the merge. It hasn’t fallen for deflation, which was a narrative pushed by many in the lead-up to the merge.

As I said in the previous analysis, I believe this to be a “deflation means the case for the price to move up and I want the price to go up, so I would say that ETH will be deflation” type of argument. But again, the merge went perfectly and it’s nice to see such a drastic drop in the issuance rate.

However, perhaps more sadly, Ethereum fees are dropping by 80% quarter on quarter. This is for no other reason than the old-fashioned decline in demand. The macro situation remains absolutely disgusting and it follows that network demand has subsided (I am likely to be a bit harsh as Layer 2 is partly driving up this drop in fees but it is largely due to a drop in demand overall) due to fall).

Leaning towards bitcoin, the percentage of long-term holders – aka diamond holders – continues to rise to its all-time high of around 64%, which was set this time last year. Data shows that this demographic – defined as those holding bitcoin for more than a year – remains unchanged, and this latest bearish month is no different.


I was curious whether the hash rate on bitcoin would increase after the ethereum merger.

Looking at the graph below showing the last three months, not much movement is visible. It makes sense, I think – there are other coins that miners have been able to easily flick with their devices instead of bitcoins.

At the top of that list is the good old Ethereum Classic – a coin I largely forgot about until I noticed its hash rate hit an all-time high on the date of the merge, almost 4Xing overnight.


Seriously, this month was all about the merge and nothing more. We can talk about all the on-chain metrics we like, and as a blockchain junkie myself, I am very happy to do so.

But the reality is that in the short term, the only thing that matters for crypto is the macro situation. The lack of activity on price around the merge proves this.

The crypto has been, and will continue to be, trading like a leveraged bet on the S&P 500 going forward. So adjust and tune in to Jerome Powell’s words, because that’s all that really matters until we get to some macro momentum again and things start to move forward.

Welcome back, Green Day.

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