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Is the merge undervalued or priced? According to crypto analyst Marcus Sotiriou, this could be a pivotal week for cryptocurrencies, so this is a big deal for investors. can be a significant issue.
The countdown to Ethereum (ETH)’s most anticipated event, the merge, is just a few hours away. After last week’s decline, prices have taken him below $1,750, but optimism that the major event will be successful remains high.
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After the announcement of the integration date, we saw an increase in ETH price before losing momentum along with the rest of the crypto market.
However, the price continues to struggle and is currently around $1,730 after last week’s decline. One question for investors to consider as they attend the event is whether the ETH merger is already priced in, or whether the market is underestimating its potential impact.
Here’s something to remember about merging.
Sotiriou, Digital Asset Broker Analyst global blockMarge says no doubt “The Most Influential Event To Happen In The Crypto Industry To Date
That’s where the benefits of change lie. For example, a 99.95% reduction in network energy usage is perfect for describing ESG. Essentially, it helps remove one of the hurdles to growing institutional interest in ETH and the wider ecosystem: concerns about cryptocurrency mining and its energy consumption.
Another long-term impact analysts are seeing is a yield of around 5% for ETH investors and implications for the wider DeFi space. Knowing how to estimate risk based on yield will benefit retail DeFi as well as institutional investors.
“Institutional investors love cash flow,” he noted in a note.
Many investors see Ethereum’s transition from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) mechanism as a positive event that, after several delays, is now certain to happen.
However, Sotiriou warns that it may not be smooth sailing soon once the beacon chain merges with the Ethereum mainnet.
Some observers say there are still unforeseen delays and other technical hurdles that disrupt the switchover, which could frustrate investors. If many validators cannot update their software in time and the new chain is not ready, or some API is “many people break in unpredictable ways
Sotiriou summarizes the risks as follows:
“Mergers are highly complex technical events, encompassing not just one large company, but an entire decentralized network, so there’s a reason it doesn’t go smoothly.
