Daily Conquest #083
Daily Actionable Insight into Crypto.
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Overview
- Ethereum Merge characteristics and misconceptions.
- Market: Where does the ETH price go from here?
- Micheal Saylor clears up Bitcoin energy use.
Good morning Fam,
???? ???? Happy Merge Day! ????????
The much-awaited merge from Proof of Work (PoW) to Proof of Stake (PoS) consensus for the Ethereum Network is now live!
Years of planning, testing, and code writing went into this historic moment in crypto history. Hats off to the Ethereum developers.
The updated characteristics of Ethereum:
- Yearly issuance of ETH will reduce from 4.3% to a negligible 0.43%.
- Alongside the EIP — 1559, which upgraded the network to burn ETH for transactions, the issuance reduction will make the ETH token deflationary if gas exceeds the estimated 7 gwei.
- The Ethereum network reduces energy consumption by ~99.9%, transforming it into the most extensive environmentally-friendly financial system ever. And firms that couldn’t invest in crypto because of ESG mandates can now
- add ETH to their balance sheet.
- Staking APY% will increase to an estimated 4–12%.
Some common misconceptions of the Merge:
- The network is NOT Ethereum 2.0 yet.
- Transaction speed will not increase.
- fees will NOT improve.
- Ethereum stakers CANNOT dump ETH immediately after the Merge. Withdrawals for stakers will begin systematically unlocking after 6–12 months.
- The Merge is just one of several steps toward Ethereum 2.0 and one of the most important. Click here to learn about all the Ethereum upgrades.
If you missed it, this issue of Good Morning Crypto has other cryptocurrencies that benefit from the Ethereum Merge.
The crypto markets were fairly quiet during the Merge event, but ETH managed to shake off yesterday’s plunge by climbing +4.10% to close the daily candle at $1,639.
High-resolution chart
Where does the ETH price go from here?
The bull case for ETH is somewhat similar to a Bitcoin halving. The supply crunch after Bitcoin halvings has sparked every major bull run in crypto. Ethereum’s issuance reduction to 0.43% is the equivalent of three bitcoin halvings in one instant!
Moreover, the issuance reduction essentially removes $2 billion worth of ETH sell pressure monthly. What was once an upstream swim for the price gains could transform into a downstream melt-up.
Ethereum is larger by market cap than Bitcoin during its previous halving to make things more interesting. During the last halving in May 2020, Bitcoin’s market cap was a cool $160m. Ethereum currently sits at $194m, and the network has $31.47 billion Total Value Locked (TVL) in smart contracts, a dynamic that Bitcoin has never encompassed.
With no heavy minder sell pressure to keep ETH price subdued, there are only macro headwinds ahead. However, if things improve, watch out, Ether (ETH) could become a very sought-after asset.
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- Celsius Judge okays the appointment of an independent examiner to investigate the network’s finances.
- Michael Saylor clears misinformation about Bitcoin’s energy use.
- The first block on ETH after transitioning to PoS had a block reward of 45 ETH.
- Binance resumes ETH mainnet deposits and withdrawals.
- Kujira launches USK stablecoin on network.
NFT & metaverse update ????
- ConsenSys is celebrating the Merge by offering the first green NFTs on the Ethereum mainnet.
- Axie Infinity: Origins Season 1 starts today!
Phew. It’s been a long time coming. After being pushed back several times, the Merge has finally transpired! We can all take a sigh of relief.
Now, the real fun begins.
Will Ethereum and its Layer-2 networks pull off a conquest of the markets, or will the likes of competing Layer-1s (L1s) Avalanche, Solana, BNB, and NEAR make up some ground?
Only time will tell!
(I got my money on the network effect of Ethereum) ????
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