Ethereum Merge Might Not Start For Bitcoin
The upcoming Ethereum merger is one of the most anticipated cryptocurrency events this year, but what impact – if any – on bitcoin remains to be seen.
Some crypto experts say that while the merger is a potential catalyst for ether, which is the second largest digital currency, it is unlikely to be a needle mover for bitcoin. This does not mean that investors should simply ignore exchange-traded funds such as the VanEck Bitcoin Strategy ETFs (XBTF ).
“Conversely, the immediate impact of the merger on bitcoin is likely to be minimal. When it comes to ether versus bitcoin, most experts seem to agree that any resulting price movement is likely to be transitory. everything, moving Ethereum to proof-of-stake has been on the network’s to-do list since its inception,” reported Frederick Munawa for CoinDesk.
XBTF is actively managed and holds bitcoin futures. These traits could be useful in the current environment due to bitcoin collapsing sharply this year and if it reverses quickly, as it has been known to do throughout its history, XBTF could react to this rebound.
For better or worse, the methodology and structure of XBTF means that the VanEck fund will not be very responsive to the Ethereum merger. This is not a negative comment. In fact, some experts remain bullish on bitcoin.
“Joe Orsini_, vice-president of research at Eagle Brook Advisorsalso believes that bitcoin will remain the dominant store of value over the long term, despite a temporary increase in Ether’s post-merger price performance,” according to CoinDesk.
For now, bitcoin is the largest digital currency by market value, and ether is undoubtedly a solid number two. The two assets stand out in the cryptocurrency space, and how the rivalry erupts in the coming years will likely affect a variety of ETFs, including XBTF.
“Bitcoin currently has approximately 15,000 knots (computers in a blockchain network) while Ethereum has around 9,500 nodes. However, Ethereum has a higher transaction volume (currently higher than 1 million daily transactions) compared to Bitcoin (about 270,000 daily transactions). Other metrics such as active addresses and the number of projects built on top of a network could also be appropriate ways to measure dominance,” CoinDesk concluded.
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