Merge Hype Helps Ethereum Regain $2000

Ethereum developers set a tentative mid-September launch date for “the Merge” this week.

ETH Breaks $2000 on Merge Rally

Merge trading is still going strong.

ETH extended its week-long rally into the weekend, breaching $2,000 for the first time since May. According to CoinGecko data, the number two cryptocurrency is trading just above the key psychological milestone at press time. It has gained about 16% in market value in the last week.

After its latest surge, ETH is up over 100% from its June lows as the broader crypto market fell in the fallout from the collapse of Three Arrows Capital.

While several cryptocurrencies have benefited from the market upturn, ETH has outperformed many assets thanks to growing anticipation of its landmark “Merge” event. Ethereum is expected to complete its long-delayed upgrade to Proof-of-Stake in the coming weeks in what has been described as one of the biggest crypto events in crypto history.

“The Merge” describes a process that will see Ethereum’s Proof-of-Work execution layer “merge” with the Proof-of-Stake consensus layer. At that point, the network will rely on validators who stake ETH to verify transactions instead of miners. “The Merge” has been widely supported by the Ethereum community due to the changes it will bring, such as a 90% reduction in ETH issuance (because the network no longer needs to pay miners) and a 99.9% cut in energy consumption.

In recent weeks, the so-called “Merge trade” has become a popular move among traders looking to cash in on the excitement surrounding the update. Alongside ETH, many other Ethereum-related tokens such as Lido and RocketPool have rallied. Ethereum Classic has also done well since it runs Proof-of-Work, so it could become a hub for miners once they leave Ethereum itself. Some Proof-of-Work advocates are even planning to fork Ethereum to preserve a new ecosystem for miners, and the plan has gained support from the likes of Justin Sun.

ETH extended its Merge rally this week after Ethereum completed its latest test run for the update on the Goerli testnet. Ethereum Foundation developers then tentatively agreed that the upgrade should be sent when the network hits a total terminal difficulty of 58750000000000000000000, after which blocks will be mined using Proof-of-Stake. It is currently expected to land sometime between 15 and 16 September.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.