Bitcoin Trading Volume Drops 23%... But Ethereum Only Down 2% ? Why?

Ethereum Draws Investor Attention Ahead of "Merge" Upgrade
Scheduled to Transition to Proof-of-Stake (PoS) on the 19th

[Image source=Reuters Yonhap News]

[Asia Economy, Lee Jungyun] As the cryptocurrency market enters a downturn, trading volume for Bitcoin, the leading cryptocurrency, has plummeted. In contrast, Ethereum, which is attracting investor attention ahead of its Merge upgrade, saw only a slight decrease in trading volume.

According to cryptocurrency market tracking site CoinGecko on September 6, the average daily trading volume of Bitcoin last month was $27.8971 billion (approximately 38.1549 trillion won). This represents a 23.69% decrease from the previous month. For Ethereum, the leading altcoin, the figure was $16.36047 billion (about 22.4465 trillion won), down 2.15% from the previous month. While Bitcoin, which accounts for about 40% of the total cryptocurrency market capitalization, experienced a sharp price decline due to concerns over interest rate hikes and other factors, Ethereum was only minimally affected.

This is attributed to the upcoming Merge upgrade, scheduled for the 19th. The Merge upgrade centers on switching the Ethereum blockchain algorithm from the existing Proof-of-Work (PoW) method to Proof-of-Stake (PoS). Proof-of-Work means participating in the blockchain and receiving rewards by mining cryptocurrency through computer processing power. In contrast, Proof-of-Stake involves depositing held cryptocurrency on the blockchain and receiving coins as compensation for participating in validation and creation. This transition is expected to partially address the issue of carbon emissions. Notably, at some domestic cryptocurrency exchanges, Ethereum's trading volume even surpassed that of Bitcoin. On Upbit and Korbit, Ethereum's 24-hour trading volume exceeded that of Bitcoin.

Additionally, on Upbit, Korbit, and Bithumb, the 24-hour trading volume of Ethereum Classic was higher than that of Bitcoin. This is also believed to be a result of the Merge upgrade. Trading volume increased due to expectations that those who do not want to switch to Proof-of-Stake would turn their attention to Ethereum Classic. Ethereum Classic emerged in 2016 following the hacking incident of the Ethereum network's 'The DAO.' After the hack, developers decided to move to a new blockchain through a hard fork, creating what is now Ethereum, while those who opposed this maintained the original chain, which became Ethereum Classic. Ethereum Classic currently supports the Proof-of-Work method.

The fact that Ethereum and Ethereum Classic have higher trading volumes than Bitcoin in Korea is believed to be due to a surge in short-term interest in the Merge upgrade. According to Google Trends, searches for "Ethereum merge" have gradually increased since early July, reaching their highest level on September 3. However, searches for 'Ethereum merge' in Korean showed sharp rises and falls, with interest rising from August 14 and reaching its peak in just 13 days.

This content was produced with the assistance of AI translation services.