on the crypto
Despite the merger, Ethereum continues to decline, as does the entire market. Yet many analysts remain confident on the asset. Some even believe it could hit the $ 2.000 mark again by the end of the year. And then buy back the price it was at less than 45 days ago. Are they right to be so confident? Let's take a closer look at their arguments!
The price situation of ETH!
Before going into the merits, let's focus on the recent evolution of the ETH token. For the ETH token, the last few months have been turbulent. Affected, like the vast majority of cryptocurrency projects, by the bear market, the asset continued to flirt dangerously with the $ 1000 level until mid-July. Before there was talk of "The Merge", the date of mid-September had already been announced. This craze led Ethereum to cross the $ 2.000 mark in mid-August. Since then, however, Ethereum has returned to decline. It appears that many investors have bought the rumor to sell the news.
Will we see an influx of institutional investors?
Ethereum is attracting more and more interest from institutional investors. This is demonstrated by the recent report published by CoinShares, according to which the volumes of investment in Ethereum they increased by $ 7 million in the week following the merger. For many institutional investors, the merger has completely changed the game. By moving from a Proof of Work protocol to a Proof of Stake protocol, the blockchain has reduced its carbon footprint by more than 99,9%. This is a significant factor for many institutional investors who, until now, have refused to invest in these energy-intensive assets. This is similar to what Tesla did to divest from Bitcoin in May 2021. For many, the decarbonisation of Ethereum could be the number one factor in attracting new investors.
Many analysts also believe that the market has already hit rock bottom or is about to do so. This could be an entry point for other institutional investors and / or help strengthen existing positions. A strong return of institutional investors on Ethereum would inevitably lead to a return of individual investors. An element that could virtuously fuel the rise around ETH. At the end of the last quarter of 2022, some analysts estimate that Ethereum could return to $ 2.000.
The Ethereum blockchain: increasingly used?
If the influx of buyers and investors is an explanatory element of the evolution of the price of a token, the use of the blockchain is also a parameter to be taken into consideration. The two are often linked. In any case, this is what Bank of America thinks, which recently indicated that the merger would be beneficial to both the ETH token and its blockchain.
Indeed, while the environmental problem has often been a drag for institutional investors, it has also been a drag for a number of developers and project owners. If The Merge does not provide a precise answer to some problems of the Ethereum blockchain, the ecological aspect no longer seems to be a problem. In the long run, The Merge should also make it possible to integrate new features that solve Ethereum's problems, such as lack of scalability and sometimes high transaction costs.
