Ethereum: Will former miners destroy ETH rates?
On September 15, the crypto market had a genuinely historic moment. The blockchain of Ethereum, the second most valuable cryptocurrency, has moved from Proof-of-Work to Proof-of-Stake. Despite the endless controversies and conflicts of crypto community members’ perspectives, the Merge went smoothly and the network was effectively upgraded.
Ethereum’s (ETH) shift to proof-of-stake (PoS) failed to continue the ETH upward pace as ETH miners intensified market pressure.
According to Bybit experts, we should expect the volatility of Ethereum and comparable crypto-assets to rise soon. In the long run, The Merge will serve as the foundation for future system changes and will build a foundational layer for the new Internet.
Miners increase the pressure on ETH sales
Furthermore, the post-merger dip in the Ethereum price follows a major migration of Ethereum miners from the market.
“The merger has been in place for a few days now, but many aren’t witnessing the effect of the daily 95% drop, which totals $49,000ETH in four days,” he stated.
As we can see, miners sold nonstop throughout this drop, dumping over $30,000 in ETH at the same time. Due to the current macroeconomic reasons placing pressure on crypto throughout the world, the price of ETH is currently at risk of plummeting another $750.
Therefore, the money of former ETH miners is merely a fraction of the total amount of ETH accessible (about 120 million units). Nevertheless, the number of coins locked within its new PoS algorithm quickly increases. That seems to be 14.6 million ETH ($19.7 billion) taken out of circulation for a time constraint. And the present decline is being driven much more strongly by the news speculation approach.
What are the prospects?
“Miners can now support a future Ethereum fork and continue mining “old ether” with uncertain prospects,” says Chen Limin, CFO and Head of Trading Operations at ICB Fund.
According to the expert, there will be two cryptos on the market: PoS Ethereum (ETH) and the new Ethereum PoW (ETHW).
Chen Limin also mentioned another possibility: some miners would migrate to mining other currencies based on the EthHash algorithm, such as Ethereum Classic, Ravencoin, Ergo, Firo, and Cortex.
However, no alternatives will improve the situation, according to the expert, because ETH mining in whatever form is unprofitable.
What will happen to Ethereum Classic and EthereumPoW?
Mining other currencies is anticipated to become less profitable if Ethereum hash rates spread to other blockchains following the merger.
Although EthereumPoW is another candidate for GPU mining, Bitpro CEO Mark D’Aria believes that ETC will eventually attract the rest of the miners. Nonetheless, the top assets earn miners slightly over $1 million each day, compared to around $20 million from Ethereum!
EthereumPoW, a potential ETH fork, on the other hand, remains a dark horse. It lacks a vibrant community, and developers are less engaged in development. In contrast, Ethereum Classic, which is currently a well-known and widespread crypto, has the potential to become stronger.
Conclusions
Anyway, only a massive and synchronized selling might have a significant impact on the price of Ethereum. Also, it will only have a short-term impact, with no long-term implications for a possible return to the uptrend.
Valentyna Bereza, Team bit4you.
