crypto strategy

The Ethereum merger is complete.

Did you enjoy the Ethereum Merge watch party last night? Welcome to Distributed Ledger, our weekly crypto newsletter that hits your inbox every Thursday. I’m Frances Yue, crypto reporter at MarketWatch. I’ll explain the rest once the merger is complete.

Find me on Twitter at @FrancesYue_ to send feedback, or tell us what you think we should cover. You can also reach me via email to share your personal stories with crypto.

Crypto at a Glance

BitcoinBTC USD,
-0.76%
gained around 4.7% in the past seven days and was trading at around $19,837 on Thursday, according to data from CoinDesk. Ether ETHUSD,
-6.61%
fell 0.9% over the seven-day period to around $1,506. Dogecoin DOGEUSD Meme Token,
-2.31%
fell 0.2% while another dog-themed token, Shiba Inu SHIBUSD,
-1.66,
lost 0.2% compared to seven days ago.

Cryptographic metrics
The biggest winners

Price

%return in 7 days

Ravencoin

$0.06

59.6%

Earth

$2.72

44.3%

Celsius Network

$1.88

39.6%

Evmos

$3.17

25.7%

cosmos center

$15.11

16.5%

Source: CoinGecko in September. 15

The biggest declines

Price

%return in 7 days

Classic Terra Luna

$0.0002

-43.8%

Helium

$4.05

-23.5%

BitDAO

$0.53

-16%

EOS

$1.42

-14.6%

Synthetix Network

$2.62

-12.3%

Source: CoinGecko as of September 15

The merger is done

Ethereum, the blockchain that underpins the second-largest cryptocurrency ether, has completed a long-awaited upgrade that is supposed to make the network 99.9% more energy efficient.

The so-called Merge upgrade, which has been in the works for six years, was completed around 2:42 a.m. Eastern Time on Thursday.

Explain : What is Merger? Here are five things you need to know

Previously, under a consensus mechanism called proof-of-work, Ethereum was secured by miners, where it required high computing power consumption. Now, under a different mechanism called proof-of-stake, the network is secured by stakers or ether holders who lock their tokens.

The merger marked the first time for a blockchain to transition from proof-of-work to proof-of-stake.

Before this happened, some industry players, such as Todd Lippiatt, head of capital markets and financial services for NAX, compared it to the year 2000 problem, which refers to the fear that some systems computers may not be able to correctly format calendar data for dates. in and after the year 2000, which could bring down global infrastructure. (Few major errors occurred in 2000.)

Others, including Brian Mosoff, chief executive of Ether Capital, have likened the merger to switching a car’s engine from combustion to electric while the car is driving down the highway.

The merger appears to have been successfully completed, but industry players are waiting to see what will happen to the surrounding infrastructure, wallet providers, node operators and specific applications on the Ethereum network within hours. and the following days, Mosoff noted.

A new proof-of-work chain?

As Ethereum miners have become obsolete after the merger, they are looking for new sources of income.

In late July, Ethereum miner Chandler Guo offered to “hard fork” the Ethereum blockchain, or split the chain into a duplicate version based on the proof-of-work consensus mechanism.

Funders of the potential new channel tweeted recently that the fork will take place 24 hours after the merger, or early Friday.

If the fork materializes, all ether holders should receive an equal amount of new tokens on the forked chain. As a result, some traders have borrowed Ether to capture this value, or are sucking up Ether and shorting Ether futures to hedge their positions.

Still, new proof-of-work tokens can have very limited liquidity, NAX’s Lippiatt noted.

“Where do we get cash for the new proof-of-work token? Because it doesn’t exist yet,” Lippiatt said. debt) or the futures on it. These are all cash settlements and you cannot deliver them,” Lippiatt added.

“Supposedly some of the exchanges can deliver the actual underlying token in the futures bond, but we haven’t seen enough of that, and if you’re a US citizen, there are very few places where you can go and get cash,” according to Lippiatt. . Exchanges such as Binance and Coinbase said they would go through “strict” listing processes to decide whether or not to list the new token.

Staking

Ether staking is now expected to return around 4.6% per year, while around 11.8% of ether has been staked, according to data from Stakingrewards.com. Holders will not be able to withdraw their staked ether until the Shanghai Ethereum upgrade, which is expected to take place in 2023.

“I think more people will bet after Merge,” Mosoff said. “You’d assume a lot of people waited for the merger to decide if they want to bet, to see it’s a success, to not be exposed to as much downside risk,” Mosoff noted.

“Many crypto trading platforms haven’t yet offered staking, or they haven’t for institutions, which will start to roll out very significantly over the next six months,” according to Mosoff.

Scalability

Although the merger did not directly solve some issues that Ethereum users have complained about, such as high transaction costs and slow transaction speeds, it paved the way for the blockchain to scale with improved efficiency.

As Ethereum has moved to proof-of-stake, the Ethereum Foundation is focusing on sharding, a multi-phase upgrade that is expected to be completed in 2023, and aims to increase network scalability and capacity.

Crypto companies, funds

Shares of Coinbase Global Inc.. PIECE OF MONEY,
-1.87%
fell 1.2% to $77.79 on Thursday, but was up 6.34% over the past five trading sessions. by Michael Saylor MicroStrategy Inc.
MSTR,
-4.00%
fell 2.7% on Thursday to $219.97, contributing to a 6% loss over the past five days.

mining company Blockchain Riot Inc. RIOT,
-2.38%
shares were down 1.8% at $7.42 on Thursday, and they are down 0.5% over the past five days. Shares of Marathon Digital Holdings Inc.
MARA,
-4.21%
lost 3.4% to $12.17, down 8% in the past five days. Another miner Ebang International Holdings Inc.. EBON,
+1.21%
saw the shares rise 1.5% to $0.48 on Thursday, for a 3% increase over the past five days.

Overstock.com Inc.
OSTK,
-5.13%it is
shares fell 5.6% to $27.02. The shares traded down 2.1% in the five-session period.

Shares of Block Inc.
SQ,
+0.90%,
formerly known as Square, added 0.5% to $68.93 and was down 2.2% for the week. Tesla Inc.. TSLA,
+0.38%
shares rose 0.3% to $303.70, up 4.9% in the past five days.

PayPal Holdings Inc.
PYPL,
-1.29%
fell 1.4% to $96.28, up 0.1% over the five-session period. Nvidia Corp.
NVDA,
-1.52%
shares were down 2% at $128.60, representing an 8% loss last week.

Advanced Micro Devices Inc.
AMD,
-1.02%
The shares traded down 1.8% at $76.05 on Thursday, down 8% from five trading days ago.

Among crypto funds, ProShares Bitcoin Strategy ETF
BITO,
-0.98%
fell 1.3% to $12.12 on Thursday, while its Bitcoin Short Strategy ETF
COCK,
+0.96%
gained 1.3% to $38.05. Valkyrie Bitcoin Strategy ETF
BTF,
-0.91%
fell 1.1% to $7.56, while VanEck Bitcoin Strategy ETF
XBTF,
-1.00%
was trading down 0.6% at $19.30.

Grayscale Bitcoin Trust
GBTC,
-2.10%
slipped 1.7% to $12.15.

Required readings

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