Why The Ethereum Merge Could Destroy ETH’s Competitors


Ethereum could retest its support zone as the general sentiment in the cryptocurrency market points to further losses. The second cryptocurrency by market capitalization led the current rally with Solana (SOL), Avalanche (AVAX), and other large-cap cryptocurrencies.

Related reading | Arthur Hayes Crystal Ball Predictions: Ethereum up to 5 numbers

In the coming months, Ethereum could continue to dominate the market. According to some experts, such as former BitMEX CEO Arthur Hayes, the price of ETH could outperform its tier 1 competitors.

At the time of writing, ETH is trading at $3,400 with a loss of 2% in the last 24 hours.

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ETH trends to the upside on the 4 hour chart. source: ETHUSD TradingView

Hayes supports his bullish thesis on Ethereum about “merging”. The upcoming ETH 2.0 upgrade that will combine the network implementation layer and its consensus layer.

This will integrate the ETH relay into the Proof of Stake consensus algorithm. In addition to Hayes, Bloomberg Intelligence Chief Commodity Analyst Mike McGlone Believes The event will be bullish relative to the price of ETH.

The analyst believes that ETH is about to “change the rules of the game.” The merger will turn ETH into a unique financial asset with commodity, equity and cash attributes.

Using the discounted cash flow model on ETH, the analyst concluded that it is currently undervalued. McGlone believes the cryptocurrency could top $6000 with a 110% upside potential.

As shown below, in a chart explaining the discounted cash flow model, the upcoming ETH staking system will provide investors with a multitude of value-creating factors.

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ETH will have more value creation factors after the merger. Source: Bloomberg Intelligence

Ethereum about to change the game?

McGlone has looked at ETH transaction fees since its inception in 2015. During this period, the second cryptocurrency by market cap saw an increase in price per transaction. This trend indicates an acceleration of activity, demand for block space, more adoption, and the aggregate value of the network.

Ethereum could maintain this trend well into 2035. At this time, the analyst expects it to reach “a decay to terminal growth rate” after a 30% annual increase in transaction fees or cash flow through 2025. These calculations are “conservative,” he said. expert.

Related reading | TA: Ethereum Prepares For Another Takeoff, Why ETH Could Test $3,750

In the long-term, ETH could see up to $9,000 or a 219% increase to the upside. McGlone said the following highlights the potential of ETH with the upcoming merger:

Although any delays or errors in the consolidation can have a negative impact, the main risk of the reassessment is the growth of sub-standard total transaction fees. Once the next stage, Sharding, splits the core chain into 64 individual “shards”, significantly increasing the area of ​​the first tier, gas prices are expected to fall proportionately. On the contrary, this will unlock the full potential of Layer 2 clusters, which can process an increasing number of transactions at a cost close to zero.



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