Investors in ether and its problematic twin stETH are eyeing a crypto milestone with trepidation: the merger.
That’s the term given to a big upgrade to the Ethereum blockchain network, on which many crypto projects are built, with the goal of making it leaner, meaner, and cleaner.
It’s difficult to find. The integration was scheduled to happen years ago but has been delayed multiple times, with engineers most recently axing plans to hit the button in June, worrying investors who began to fear it might never see the light of day.
Market participants now believe that the end of the wait is near. But it’s not a sure thing.
Investors have priced in a 67 percent likelihood that the upgrade, also known as Ethereum 2.0, will occur by October on Polymarket, a crypto site where users place bets with stablecoins on the occurrence of future events and a 13 percent chance that it would occur by September.
The Ethereum Foundation, which compares the merger to changing the engine of a spaceship in mid-flight, says on its website that it will “ship” around “Q3/Q4 2022.”
The merger would be a huge relief for ether, which has fallen due to previous delays and diminishing faith in the upgrade. The second-largest cryptocurrency was the last trading at about $1,200, down from just over $3,500 in April, though much of the recent pessimism about the upgrade has been overshadowed by broader market turbulence.
The merger could also mark the end of agony for investors holding staked ether, or stETH, which symbolizes either being locked up in a testing environment for the upgrade and is difficult to redeem at scale until at least six months after the union.
“It’s just the sheer mass of the protocol. Ethereum is just so huge that I don’t think they’re going to reach their deadline in time,” said Brent Xu, founder, and CEO of Umee, which is building a base-layer blockchain for borrowing and lending.
“People are just scared that their stETH is not going to be worth anything because the Merge is probably going to take longer than expected,” said Xu.
