This past week Ethereum’s price surged back to life by recouping over 50% of its value in a week, but the broader up-trend has remained intact, and the reason is not far-fetched.
Yes, the increase is worthy of praise and highly technical. However, the sepolia testnet successfully merged to proof of stake on July 6, 2022, showing that the move has been “crypto fundamental” setting the stage for the mainet merge scheduled for early autumn.
But prior to the successful merge of July 6th, the Ropsten test had already taken place on June 8th, serving as a rehearsal for the main event. The Ropsten testnet which is a sandbox network that enables developers to test their updates and codes In a secure environment provided the opportunity for the Ethereum team to carry out tests which proved successful.
This merger is something worth looking forward to because if all goes well it will transform ETH into a deflationary, yield-bearing mega-cap asset that will prove beneficial to both investors and users. Further, it will make executions of transactions faster and cheaper, a potential upward spiral in Ethereum price, reduced energy consumption due to transitioning from PoW to PoS, and deactivating the difficulty time bomb.
In addition, it will only take little effort as there is more than enough to go around in Ethereum allocation. Also, there has been an influx of institutional buyers this past week.
Ethereum’s shift to proof-of-stake mirrors the fundamental structure of all volatile assets, which can be off-putting but is satisfactorily justified. How? The Ethereum ecosystem functions like a global computer having a settlement layer with huge potential and lots of upcoming applications.
The arrival of digital assets has made early-stage technology liquid and using their highly volatile nature as an excuse, many have claimed that these assets lack fundamentals. From the look of things though, Ethereum is proving them wrong.
