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HomeNEWS'The Merge' went well, but the price is plummeting • ENTER.CO

‘The Merge’ went well, but the price is plummeting • ENTER.CO

After so much waiting, ‘The Merge’ went well, but some results of the Ethereum merger seem not to be going as expected at first.

Now Ethereum is a greener digital currency and could be reborn as a new way of exchanging digital assets. But the spirits seem not to be quite right, instead of encouraging a revaluation of the ETH cryptocurrency, the opposite is happening. In fact, this situation is even affecting other digital assets such as Bitcoin. One of the most obvious changes with ‘The Merge’ is that the coin went from using a PoW (Proof-of-Work) consensus mechanism to a PoS (Proof-of-Stake) one. Its main benefit is that energy consumption is reduced by 99.95%.

But that’s not all, SEC Chairman Gary Gensler stated that this change in Ethereum may trigger closer surveillance by US financial institutions. This means that Ethereum is closer to being an asset. stock market than a cryptocurrency. This means that ETH investors can ‘stake’ and then collect profits.

It may interest you: ‘The Merge’ has already started: this is what would change for the Ethereum network

For Gensler, “investors are anticipating profits based on someone else’s effort.” Which, in his opinion, would allow the SEC to consider it more as a dividend and profitability action and not as a Bitcoin-type cryptocurrency. This then sets the stage for reaching a regulation of the authorities. Although these statements by the SEC chairman did not refer to Ethereum directly, they did cause a notable reaction in the price of the digital asset.

This coin went from touching 1,750 dollars to falling to 1,300. Gary Gensler was no doubt referring to coins that are based on the PoS consensus mechanism, but Bitcoin uses the PoW mechanism. In theory it should not be affected, but even so its price is also going down. Bitcoin went from being above $22,500 to below $18,500. As ‘The Merge’ went well, Ethereum hopes that in the future this will arouse more institutional interest, although for now the effect has not been as expected.

Image: Worldspectrum at Pexels.com

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