Ethereum successfully completes its first test merge
In a recent development, Ethereum has completed its first successful test merge on the Ropsten network. What does this mean for the future of cryptocurrency? Read more below.
How does Ethereum scheduled upgrade can affect the crypto market?
The crypto market is as volatile as ever, and stakes have never been higher. With Ethereum completing its first test merge, many investors are wondering what it can possibly mean for the market as a whole. The success of the company’s merge on its Ropsten test network is a crucial step towards accomplishing Ethereum’s software upgrade later this year. Crypto experts are also predicting a boost in the cryptocurrency prices in the upcoming weeks.
Ethereum’s transition in its main network to proof-of-stake is slated for the second semester of 2022. According to Ryan Grace of Tastytrade, Ethereum’s enhancement will boost its transaction speed and address concerns about the company’s environmental impact. There should also be a series of other improvements as well according to Grace’s analysis.
He says that although there are many variables that impact ETH’s prices. However, moving from proof-of-work to proof-of-stake will diminish the amount of ETH’S issued per block by approximately 80%. The move will also provide more efficient and competitive transactions. The outcome could mean an increase in demand across the Ethereum blockchain.
Cryptocurrencies such as Bitcoin and Ethereum haven’t had the best 2022 so far yet. The market’s volatility is largely due to the current macroeconomic uncertainties surrounding worldwide economies. Bitcoin, the world’s most popular crypto, has had major price drops and remains in a turbulent trading range between $27,000 and $31,000 since last month. Anything above the $31,000 mark have been short-lived outbursts.
Ethereum has followed suit, staying in a range between $1,500 and $2,000 over the last two months. However, Ethereum’s chance of improvement could rise significantly within the next few weeks. That is because the transition from proof-of-work to proof-of-stake on its Ropsten test network could draw a notable positive attention to the company.
Tim Beiko, Ethereum’s developer, tweeted that the Ropsten network managed to successfully complete its transition last Wednesday. Although this is a great achievement for the company, Beijo made sure to reiterate that the merge on the Ropsten was just a dress rehearsal, and the actual merge will happen later on the blockchain.
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What does the merge mean for crypto investments?
Ethereum has been one of the best smart contract blockchain for years. Now, the company’s transitioning to a technology that is much less energy-intensive. Many financial experts believe that there will be an upside for Ethereum investors. However, it is not possible to say for sure. While some say the price of ETH might rally up to $10,000, others firmly believe it will stay bearish. It’s all speculative at the moment and everyone’s just waiting to see how companies and investors who have built their tech on Ethereum’s blockchain will respond to these changes.
However, it is safe to say that the merge should not affect an investor’s long-term strategy. That is because it will take quite some time until everything falls into place. Not to mention that other factors like increasing regulation could very well affect all of the crypto market in the meantime. What is happening right now is an opportunity for the investor to assess their risk tolerance for cryptocurrencies and strengthen their crypto and blockchain knowledge. Financial experts recommend having up to 5% of a portfolio in crypto due to it being such a speculative and new asset class. If investors follow this advice and avoid investing more, then whatever happens in the next coming months should not affect their funds as much.
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