Chainalysis notes price divergence between Ethereum and Bitcoin after The Merge

The price of Ethereum could display dynamics independent of other digital assets after слияния, as staking would make the second-largest cryptocurrency resemble bonds or exchange-traded commodities. This is according to Chainalysis in its study.

16/ Read more about these on-chain metrics to get more insights into the merge’s potential impact on crypto markets. https://t.co/9uuvX8Kn6T

— Chainalysis (@chainalysis) September 7, 2022

The upcoming September 15–16 merge will lead to a surge in institutional investor interest. They will be attracted by an expected annual yield of 10–15%. The indicator will exceed the returns from such financial instruments as bonds and commodities.

According to Chainalysis, the number of institutional Ethereum investors (with balances of more than $1 million in ETH terms) has “steadily grown” — from fewer than 200 in January 2021 to about 1,100 by August this year.

A faster rise in the metric after The Merge would confirm the hypothesis that institutions “are indeed viewing staking the second-largest cryptocurrency as a sound profit strategy.”

Experts also noted the divergence between Ethereum’s price and its synthetic counterparts, which unlock value locked in smart contracts.

“The Shanghai upgrade (6–12 months after The Merge) […] will allow withdrawals of assets, providing greater liquidity for players and making staking more attractive”, according to the report.

Experts also noted the move away from energy-intensive mining with a reduction in energy consumption “by more than 99%.” This will boost comfort for investors aiming to meet ESG-стандартов инвесторов.

In September, Ethereum activated the Bellatrix upgrade. The upgrade is the final step before migrating the mainnet to the Proof-of-Stake (PoS) algorithm.

Earlier, analysts at Glassnode concluded that after The Merge Ethereum will likely become deflationary.

In April, former CEO and co-founder of BitMEX Arthur Hayes predicted Ethereum would rise above $10 000 by the end of 2022. He also suggested that the asset would be perceived as a commodity-backed bond.

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