Thursday, November 14, 2024

Electric ether rises as they approach merging

It appears that Ethereum is undergoing a massive upgrade. The “Merge” is almost probable to occur in September after years of delays, with the blockchain’s underlying encryption undergoing a major change to a system where the production of new ether tokens becomes far less energy-intensive.

“It’s an exciting time for the Ethereum ecosystem,” said Omar Syed, co-founder of smart contract platform Shardeum. “I think there will be drama surrounding the Merge, but I don’t think there will be any technical hiccups.”

According to investors, ether is outperforming big brother bitcoin.

Even though it’s far off its November 2021 record of $4,868.79, Ether has witnessed increases for six straight weeks, taking it up from a 1-1/2-year low of $880 in mid-June to values approaching $2,000 at this point. Comparatively speaking, Bitcoin has been insignificant, rising 37% from its June low to $24,116.

Ether is eroding behemoth bitcoin’s market share: according to CoinMarketCap, it now represents nearly a fifth, or 19.7%, of the total cryptocurrency market value of $1.14 trillion, up from less than 14.9% two months ago. The share of bitcoin has decreased over the same time period, from 44.9% to 40.2%.

“Crypto is still very tightly coupled, I think when the Merge successfully completes it could drive up the price of bitcoin as well,” said Alex Miller, CEO of Hiro, which builds developer tools to create applications for bitcoin.

If Ethereum’s developers are successful, as is widely anticipated, it might revolutionize the blockchain by making it easier to use and more affordable to mine for fintech and other cryptocurrency businesses.

Of course, there are many uncertainties surrounding the elusive shift, which has been postponed multiple times. Most recently, developers abandoned plans to activate the switch in June, which alarmed investors who began to worry that it would never happen.

The Merge is also risky, and should it fail, the fate of the about 122 million ether in circulation, valued at nearly $232 billion, could be in jeopardy. If the upgrade doesn’t go well, it would “set the entire crypto world back five or 10 years,” Hiro’s Miller said.

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