How Ethereum Could Overtake Bitcoin After The Merger

How Ethereum could overtake Bitcoin after the merger - ethereum the merge arrive the surge the verge the purge the splurge v3 599686 1280x960 1The cryptocurrency markets are in retreat again during the Asian trading session on Monday morning, but have rallied over the past fortnight, mainly led by Ethereum.

The network will enter the final testing phase for the Merge on August 11, while the mainnet launch is scheduled for September 19. The Merge will link Ethereum's current proof-of-work chain with the new proof-of-stake chain, which will become the main blockchain. The network consensus mechanism will move to the staking instead of mining.

There has been a lot of analysis and discussion recently about why this is such a positive event for Ethereum. Some even believe it could surpass or "overturn" Bitcoin, becoming the largest digital asset in the industry.

Why merger is such an important event

On July 24, Ethereum analyst and researcher Vivek Raman tweeted because he thought ETH would overtake BTC.

The first argument was based on the offer, as 900 BTC is mined every day. This means that there is always some selling pressure on Bitcoin from miners taking profits. Without new buying pressure, Bitcoin's price would drop, he added.

If the selling pressure disappears, prices should naturally rise, as will happen for Ethereum after the merger.

Ethereum is currently mined with 14.250 ETH issued per day; however, after the merger, the issue is likely to become deflationary due to the fee burn mechanism introduced in August 2021. In the past week, 13.249 ETH has been destroyed through this mechanism.

"This means there may be * net daily buying pressure * on ETH (without a dollar of outside capital entering)," he added.

"ETH will turn into a sustainable asset from an economic (and environmental and theoretical) point of view, probably more than BTC".

Another bullish factor he did not mention is that Ethereum's energy consumption will be reduced by more than 99% after the merger. This will make the network more acceptable to environmentalists, regulators and politicians, and more attractive to investors and businesses. Bitcoin will always be proof-of-work and will require more and more energy as mining adoption and competition increases.

ETH price outlook

Ethereum prices have seen a 30% surge in the past fortnight and hit a six-week high at $ 1.639 on Friday. A range-bound channel appears to have formed over the past week, but has failed to break out of the resistance.

ETH is currently trading at one quotation of $ 1.518, losing 2,4% in the last 24 hours. The asset is still down 69% from its November 2021 all-time high, so the recent rally could be short-lived.

The direction of the market this week is likely to be led by macroeconomic news from the US, with the Federal Reserve's fresh rate hike and the announcement of second quarter GDP data.

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