Ethereum’s test merge just happened, and the stakes are high for crypto investors wondering what it might mean for the market.
The merge on ethereum’s Ropsten test network is a critical step to accomplishing its full software upgrade later this summer, and experts are predicting that ethereum could see a boost in price in the coming weeks or months.
Ethereum is slated to transition from proof-of-work to proof-of-stake on its main network in August. Ethereum’s upgrade will address concerns about its environmental impact and dramatically improve its transaction speed, among other improvements, according to Ryan Grace, head of digital assets at Tastytrade, a financial network that focuses on market analysis.
“While many variables influence the price of ETH, the move to proof-of-stake is estimated to reduce the amount of ETH issued per block by around 80%,” Grace says. “It will also result in more efficient and cheaper transactions, which could lead to an increase in demand across the ethereum network.”
Cryptocurrency Prices Today: Bitcoin, Ethereum
Bitcoin, ethereum, and other cryptocurrencies continue to be as volatile as ever — largely driven by ongoing macroeconomic uncertainty. Bitcoin, the largest crypto, has largely remained in a choppy trading range between $28,000 and $31,000 since mid-May. Any noteworthy price bounces have been short-lived.
Ethereum has followed a similar pattern, staying in the $1,800 to $2,000 range over the last few weeks. But that could change significantly in the near- or long-term as the blockchain transitions from proof-of-work to proof-of-stake on the Ropsten testnet, ethereum’s alternative blockchain that’s used for testing.
Ethereum developer Tim Beiko announced in a tweet Wednesday that the network was able to successfully transition to proof-of-stake on the Ropsten testnet. While this is a major milestone for ethereum, Beiko says the merge on the testnet is a “dress rehearsal” ahead of the merge on the main ethereum blockchain.
Cryptocurrencies have been moving in tandem with stock markets in recent months, which have had a rough year amid ever-increasing inflation, shaken investor confidence, rising interest rates, and recession fears. The S&P 500 has fallen more than 13% in 2022, while the tech-heavy Nasdaq has been hit harder, down 23% this year.
Ethereum’s Price Today (June 9)
Ethereum’s price has been holding steady over the last few days, trading below $1,800 Thursday.
Experts are divided about the next directional move for ethereum. While some believe the merge will be transformational for ethereum and boost its price significantly, others are more skeptical. Whatever happens with ethereum’s price over the next few months will ultimately depend on how successful the merge is. A software upgrade this big can easily be susceptible to bugs or technical issues, so the outcome of the merge has huge implications not only for the ethereum network but for all of crypto.
“This merge has been talked about for a long, long time, and it’s finally coming close. And I do see that as a pretty big catalyst for attention coming back into altcoins,” Osprey Funds CEO Greg King told Coindesk. ”It has a lot of potential — they just need to solve their bottleneck issues. The merge should help that.”
Bitcoin’s Price Today (June 9)
Bitcoin’s price hasn’t moved much over the last few weeks, holding steady near $30,000 Thursday. The leading crypto has been extra volatile ever since last month’s broader market crash, primarily bouncing around the $30,000 range.
Crypto expert Wendy O warns bitcoin could drop even further in the next month, anywhere between $18,000 and $27,000, if its price doesn’t start to level off. But even with the big drops, O is still bullish on bitcoin in the long run.
@cryptowendyo I still think we will see something like this end of July. I’m also happy to be wrong #TopGunMode #bitcoin #momtok ♬ sonido original – •Rol mitsuri Sam!!~ 🌾
“For bitcoin, I like the dollar-cost averaging strategy because I like bitcoin long term. It is one of the more stable [crypto] investments that a person can make,” O told NextAdvisor.
What Will the Ethereum Merge Mean for Crypto Investors?
After years of being the top smart contract blockchain, ethereum is transitioning to a less energy-intensive technology. So, what does this mean for your crypto investments?
Some experts say there is upside for ethereum investors, but it’s impossible to say with certainty. Some are calling for the price of ethereum to rally to upwards of $10,000, while others remain bearish. But it’s all purely speculative right now — many are waiting to see how investors and companies building their tech on ethereum’s platform respond to the changes.
If anything, the merge shouldn’t affect your long-term investment strategy. It will take a while until everything is in place, and other factors such as increasing regulation could affect ethereum and other cryptos during this time. Instead, use this time to focus on strengthening your knowledge about crypto and blockchain tech and assess your risk tolerance for crypto.
Experts recommend maintaining less than 5% of your portfolio in cryptocurrency because it is such a new, speculative asset class. As with any investment, don’t invest any more than you’d be OK losing.
How Investable Are Bitcoin and Ethereum Right Now?
If you’ve done your research, considered the risks, and feel like you’re ready to invest in some crypto, ethereum could be a decent bet. According to NextAdvisor’s new Investability Score, ethereum and bitcoin are among the best cryptos you can invest in right now.
Bitcoin has the highest score of all cryptocurrencies, with ethereum close behind — even if there’s a return to prices closer to their all-time highs in late 2021. Here’s how our score shakes out for 10 cryptocurrencies that are consistently among the top by market cap, excluding stablecoins, for reference:
|COIN||NEXTADVISOR INVESTABILITY SCORE|
|Binance Coin (BNB)||49/100|