"Sell on Rumors, Buy on News"... Ethereum Drops 9% Despite Merge Upgrade

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Although the merge upgrade that transitions the blockchain system has been completed, the price of Ethereum plummeted by more than 9%.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 8:43 AM on the 16th, the price of Ethereum was recorded at $1,475 (approximately 2.06 million KRW), down 9.71% from the previous day.

The day before, Ethereum founder Vitalik Buterin tweeted, "We have completed the (merge upgrade)" and added, "This is an important moment for the Ethereum ecosystem." 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 through computer computational processing and receiving coins as rewards, while Proof of Stake means staking held cryptocurrency in the blockchain to participate in verification and creation in exchange for coins. The merge upgrade is expected to partially resolve carbon emission issues.

However, after the merge upgrade, the price of Ethereum showed a downward trend. As the saying goes, "Buy the rumor, sell the news," the price is moving accordingly. Cryptocurrency specialized media CoinDesk explained, "The nearly 9% drop does not seem related to the effects of the merge such as increased energy efficiency or reduced Ethereum supply," adding, "Instead, as trades related to the Ethereum merge upgrade are released, the price is moving as if to 'sell the fact.'

Ethereum's price had already fluctuated ahead of the merge upgrade. The price, which was in the $1,500 range earlier this month, surged to the $1,700 range on the 11th but then fell back to the $1,500 range the day before.

With the successful completion of the merge upgrade, the next step, the Surge upgrade, is scheduled for next year to reach Ethereum 2.0. Through this, sharding is planned to be introduced, which refers to the technology of splitting data and processing it through shard chains. It is expected to increase the number of processed data on Ethereum and improve transaction speed and scalability. After the Surge, the Verge, Purge, and Splurge phases will proceed.

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