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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