- Views from industry experts/analysts on the Merge and its impact
- Ethereum NFT sales and transaction figures tested multi-month lows in August
- Ether (ETH) and Ethereum Classic (ETC) standout as top gainers among altcoins
Ethereum completed the final preparation step ahead of the Merge following the activation of the Bellatrix upgrade, which serves as the update to the Ethereum Virtual Machine. The activation heralds the main event expected as early as next week. This latest milestone adds to events building up momentum and interest in Ethereum.
Here’s a breakdown of exciting headlines around the anticipated event and what it could mean for the broader ecosystem.
Ethereum mining revenue surpassed Bitcoin’s in August
August marked the last whole month of Ethereum running wholly on proof-of-work and just like the month before, Ethereum mining revenue exceeded that of Bitcoin. Miners on Ethereum netted $756.11 million in August, representing a 21% swell from July’s $620.65 million, while Bitcoin miners generated $657 million last month, up from $597 million in July. Analysts contend that the recorded Bitcoin miner revenue could have slightly been higher had mining difficulty not spiked towards the end of the month.
In a Wednesday report on the knock-on effects of the Merge, Chainalysis team penned that the hash rate currently allotted to Ethereum mining will either vanish or be distributed among other networks except for Bitcoin. This is because the infrastructure adopted in mining Ethereum doesn’t work for Bitcoin. The report also discussed other potential impacts, including increased ETH staking and more adoption by institutional stakers.
The latter forecast is shared by many other industry insiders, including Bitwise CIO Matt Hougan as well as Bitwave CEO and co-founder Pat White. Speaking to CoinTelegraph, Hougan underlined the energy-efficient proof-of-stake consensus as a desirable pull for institutional investors. At the same time, White theorized that the de-risking of Ether would boost institutional capital inflow.
Migrating Ethereum miners have seemingly found a home on Ethereum Classic, whose token has gained pace in the market. The hash rate for the network has also increased in the last few months, with significant spikes being recorded on two occasions this year.
The first between 26 – 30 July and an even steeper one between 13 – 20 August. The hash rate is currently swinging around its highest mark in history.
Ethereum NFT sales volume hit 13-month low in August as transactions fell under 1M
While the Ethereum ecosystem has been vibrant in recent weeks, its NFT space has continued deteriorating – a reflection of the entire industry. CryptoSlam data shows that almost $497 million in Ethereum NFT sales was recorded in August, down from around $535 million in July. Ethereum NFT transactions also traced a similar path, sliding under the 1 million mark for the second time this year after March.
The notable decline was primarily because of the shrinking volume of unique buyers. The number of unique buyers touched a 9-month low of 199,454 in August, marking the first instance of this figure settling below 200,000 this year. Worth mentioning, Solana processed more NFT transactions with almost 1.6 million, while Flow and Polygon trailed with 648,169 and 556,791 transactions, respectively.
Former BitMEX co-founder Arthur Hayes says Ethereum Merge trade is the most obvious
In a separate interview with the Bankless channel co-hosts on Wednesday, ex-BitMEX co-founder Arthur Hayes re-emphasized that the hype around the Merge will have a bullish impact on the ecosystem’s native token, Ether. The veteran crypto trader highlighted the ETH’s post-Merge issuance cut and projected growing demand as catalysts that will likely help drive Ether price up.
Hayes acknowledged the recent turbulency in the market attributable to the poor macroeconomic picture as a potential hamper to Ether’s surge. Nonetheless, he expects the token to touch $3,000 if the transition to PoS goes well, arguing that the momentum behind the milestone will outshine the macro environment.
“Unless you’re telling me that DeFi usage falls off a cliff with issuance as well, then you’re saying demand is greater than supply, therefore the price has to rise, in my opinion,” he said.
The OG crypto trader expressed skepticism on the final shipping date and the event’s success while also observing that the scheduled timing is unideal coming on the back of a liquidity crisis event. Hayes also pointed out that he is not confident about the switch itself delivering an immediate price boost, although it is a display of the competence of Ethereum’s development team.
While Hayes’ remarks convey a less optimistic tone, Consensys founder and Ethereum co-founder Joe Lubin looks ahead to a successful and smooth update. In his opinion, another fork will also emerge though its survival and relevancy aren’t guaranteed.
“I think at least a temporary fork is likely […] but I can’t imagine wanting to build anything, or put anything of significant value, on a chain that has so many things that are fundamentally broken and abandoned,” Lubin told Times.
Impact on L2 solutions
Several industry insiders have thus far expressed their views on the impact on these ecosystems, including Anton Gulin of AAX Exchange, who holds that the transition to PoS will compel layer 2s “to adapt or cease to exist.” In a blog post published last week, however, Polygon’s team clarified that while the Merge (and what it delivers) is a historic milestone for Ethereum, it won’t reduce the need for scalers.
Another group of experts believes that the Merge will ultimately help make L2s efficient. Zilliqa researcher Vlad Totia opines that layer 2 solutions will improve along with Ethereum in different aspects, including user and developer experience. For Daniel Nagy from Swarm Foundation, the Merge will, in the long run, affect rollups which will see increased adoption and side chains that will see less interest,
Ethereum (ETH) and Ethereum Classic (ETC) price action
Ethereum and Ethereum Classic tokens have both enjoyed more gains among top altcoins. The premier altcoin, ETH, was trading 6.31% in the green on the day and up 7.46% in the last seven days. Though ETC was only up 2% on the day at the same time, its 18% price swell in seven days makes it among the best performing tokens within this timeframe.
One particular chart to watch in the coming days is that of ETH/BTC, which is at a yearly high. The excitement around the Merge has particularly been vital for the ascent in the ETH/BTC pair. TradingView’s ETH/BTC chart shows that the pair has climbed from 0.053 in July to 0.085 at present.
The last time it hovered around the current range was at the end of November 2021 and May 2018 prior to that. Earlier this week, Bitcoin’s market dominance dropped under 39% for the very first time. Ethereum’s dominance, on the other hand, is back above 21%confirming the shift of interest from the flagship cryptocurrency to Ethereum.
To learn more visit our Investing in Ethereum and Investing in Ethereum Classic guides.
The post Roundup: Merge Momentum, August ETH Miner Revenue, ETC Surge, Tapering NFT Sales and Transactions appeared first on Securities.io.
