"Crucial Moment for the Ecosystem"... Ethereum's Price Remains 'Down' Despite Successful Merge

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of Ethereum, the leading altcoin, showed weakness despite the successful Merge upgrade.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 3:46 PM on the 18th, the price of Ethereum was recorded at $1,454 (approximately 2.02 million KRW), a sharp drop of 16.92% compared to a week ago. Compared to the price just before the completion of the Merge upgrade, it fell by 8.44%. However, it rose 1.81% compared to the previous day.

Ethereum completed the Merge upgrade on the 15th of this month. 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 primarily involves transitioning 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 computations and receiving coins as rewards. In contrast, Proof of Stake means staking held cryptocurrency in the blockchain to participate in verification and creation, receiving coins as compensation. The Merge upgrade is expected to partially resolve carbon emission issues.

However, the price showed weakness. It is interpreted that concerns about tightening influenced the market despite the Merge upgrade. The U.S. Consumer Price Index (CPI) for August rose 8.3% compared to the same month last year, exceeding the market forecast of 8.0%. Although the Federal Reserve (Fed) is expected to raise the benchmark interest rate by 0.75 percentage points at the September Federal Open Market Committee (FOMC) meeting, concerns have emerged that a 1 percentage point increase might be possible.

Speculative buying occurred on expectations of the Merge upgrade, but it shifted to selling pressure afterward, resulting in a downward trend. It is evaluated that the positive news was priced in early. The price, which was in the $1,500 range at the beginning of this month, surged to the $1,700 range on the 11th due to the positive impact of the Merge upgrade but then declined.

With the completion of the Merge upgrade, the next phase, the Surge upgrade, is expected to proceed from next year. This will introduce sharding, a technology that splits data to be processed by 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 follow.

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