The Ethereum merge is expected tomorrow
Summary: The Ethereum merge is set to launch tomorrow morning. We take a last view at its expected execution and impact.
We are nearing one of the largest events in the history of crypto - the highly anticipated Ethereum merge - which currently is expected to occur tomorrow morning at 05:00 AM CET but may occur slightly later in the day compared to this estimate.
The Ethereum merge fundamentally changes the way that transactions are validated on the blockchain by changing Ethereum’s consensus mechanism from proof-of-work to proof-of-stake. The latter consumes around 99.95% less energy. As validators are rewarded in newly issued crypto, the lower amount of required energy allows a lower issuance of new Ether, thereby minimizing the dilution of existing Ether holders.
We expect the merge to occur flawlessly as it has been extensively tested for at least 1.5 years. If the merge occurs flawlessly, the proof-of-stake consensus will take over from proof-of-work in a matter of seconds with no downtime as soon as the point of the merge has been reached. Within around 13 minutes following the merge, we know whether the upgraded blockchain behaves as intended by finalizing blocks. Though, it is important to clarify that the merge and Ethereum’s proof-of-stake consensus are experimental technologies. If issues arise, it will potentially delay the merge as Ethereum may be rolled back to the current proof-of-work chain until the issues are fixed. In that case, we expect the price of Ether to drop but the volatility to surge.
Since many exchanges halt Ether withdrawals and deposits during the merge, there may become price differences between exchanges, while market makers may not be able to do sufficient arbitrage. This will particularly be the case if the merge does not turn out right. Due to this, we recommend being alert if trading Ether around the merge.
To follow the merge closely, we recommend Ethereum Foundation’s live stream. The live stream is planned to go on air around one hour before the merge.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.