Crypto Weekly Digest: Despite Gains, Experts Want Investors to Wait and Watch
Cypto investors have seen renewed interest in the crypto markets over the past seven days with the approach of the “merger”. The crypto market cap crossed the $1 trillion mark after two weeks, with Bitcoin up 3% and Ethereum up over 6%. However, experts believe that investors should continue the wait-and-see approach.
“It is advisable to have a long-term approach in the crypto market with a buy-on-dip strategy in strong tokens only,” said Dileep Seinberg, founder and CEO of the bill payment platform and of crypto utility, MuffinPay, “There are rate hikes and liquidity being pumped out of the markets, which doesn’t bode well for riskier assets.”
The impact of inflation and rate hikes, Seinberg said, will not impact any particular cryptocurrency but the market as a whole. “Speaking of crypto winter or rate hikes, it won’t impact any particular token, it will cast a spell over the market,” he said.
With the Ethereum merger, scheduled for September 14, energy consumption in mining these coins is expected to decrease by 99%. This will change Ethereum’s mechanism from the current Proof of Sale (PoS) to Proof of Work (PoW). As miners now shift their focus to other proof-of-work (PoW)-based coins, the value of other crypto assets has increased.
“Anticipation of the upcoming ETH merger which is expected from September 12-15 led to a 6% increase this week while other PoW protocols also hit monthly highs in price and hashrate as Ethereum miners are looking to use their computing power elsewhere post-merger,” the CoinDCX research team told Business Standard.
“DeFi led sector returns appreciating 15% this week, driven by a recovery in the Luna ecosystem and due to overuse of crypto collateral in DeFi protocols ahead of the upcoming Ethereum merger,” said he added.
Ethereum will be on investors’ radar, however, it may not perform as well as expected.
“When the highly anticipated Ethereum merger was announced, there was a sudden price increase, which later collapsed,” Seinberg said, “Even after the merger and in the short term, it will be on the radar of the crypto community, which treats it as a get-rich-quick scheme, which is not true.”
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