Ethereum Merge Closer Than EVER!! What It Means For ETH!

This has been a brutal bear market so Far and eth has not been spared However recent optimism around the much Anticipated merge has led to a bit of a Relief rally So is this the start of a recovery or Could it be nothing but a ruse to get You wrecked That’s exactly what i’ll be exploring in My latest ethereum update so if you have Been considering picking up samith then This is a video you absolutely Cannot afford to miss [Music] It’s been over three months since my Last ethereum update and a lot has Happened since then I mean back then eth was trading above 3 200 I was at bitcoin miami around that time Too and the feeling in the crypto market Was bullish af However those lambo dreams came crashing Back down to earth not long after We had numerous factors coming together To create a shitstorm the likes of which The crypto market hadn’t seen before Firstly the global macroeconomic picture Took a dramatic turn for the worse the Fed started to jack up those interest Rates and down came the valuations of Nearly all risk assets Of course crypto is one of the riskiest Assets in that risk bucket and was hence

Highly exposed to this extraction of Liquidity But it’s the crypto specific factors Which appear to have really impacted all Cryptocurrencies including eth First the terror implosion reverberated Across the crypto space that’s because Those who were burned by the collapse Had to sell off their good assets to Make up for the losses they had incurred On terror and ust In the immediate aftermath things Appeared to somewhat stabilize but any Reprieve was short-lived as the broader Impact of this disaster only started to Play out a few weeks after the event Now perhaps one of the most relevant to Eth was the de-pegging of lido finance’s Staked st eth which had many stakers Concerned I’ll add though that this wasn’t Technically a de-pegging and i explained That in more detail in this clips video Which i’ll leave in the description Even though st eth was not really Comparable to ust the emerging disparity Between eth and st eth was enough to Spook the market Some of the largest institutional Investors in st youth including the Likes of alameda research three eros Capital and celsius sold their holdings Of course we know exactly what happened To those latter two

A massive liquidity crunch in the crypto Space led to people selling good assets Like eth and btc in order to meet their Margin obligations Leverage played a massive factor as it Always does and some people were forced To part with their crypto i.e they were Liquidated On top of all this the macro picture Continued to deteriorate as inflation Kept climbing This left the fed with no choice but to Increase the size of the rate rises So that’s the backdrop to the collapse We’ve seen in the price of eth i will Add that most of these issues despite The fud around st eth were related to Broader market conditions and nothing Eth-specific But there is one ethereum specific thing That we all have our eyes on and that is Of course the merge Ah yes the merge such stuff as memes are Made on The continual delays to ethereum’s move To proof of stake have left many Disillusioned and frustrated however Despite the gloomy market sentiment and The disparagement ethereum devs are Still beavering away at an even more Frenetic pace And they are getting close At the time of my last ethereum update i Talked about the numerous eth test nets

That had successfully completed the Merge These included the likes of kinsugi last Year and kiln in march Then in early june one of the oldest and Most established test nets roxton also Successfully completed the merge It was almost bug free and i’ll leave This twitter thread which gives a Complete breakdown of what went down With the roxton merge below It was an exciting event for the Ethereum community and gave a renewed Sense of optimism that we could see Emerge by august However cold water was thrown on those Hopes a few weeks later when the Ethereum developers took the decision to Delay the difficulty bomb Now for those unfamiliar the difficulty Bomb is a hard-coded mechanism in Ethereum’s protocol that’s set to Explode after a certain number of blocks Are mined When that happens it swiftly increases The difficulty on the ethereum network Eventually as this difficulty increases The bomb makes it impossible to mine any More eath Now the main purpose of this bomb is to Force ethereum miners to switch away From the proof of work chain and move Over to the proof of stake chain I’ll leave additional info about the

Bomb in the description for you Anywho the reason why the eth devs Decided to delay the bomb is because They didn’t want it going off before They were confident of the merge Successfully completing So With the grey glacier update the devs Pushed the bomb back to this block Number over here That is expected to be mined in September However pushing the bomb back to that Date was seen by the crypto community as A sign that they could not expect to see The merge in august after all This dampened enthusiasm at a time when The whole market wanted something to Look forward to as a result of this news And the broader market mayhem eth’s Price fell considerably in june If you wanted a proxy for how likely the Market viewed the merge you can always Take a look at the ratio of st eth to Eth As you know st eth is tokenized staked Eth and can be seen as a right to Unstaked eth coins once ethereum is a Proof-of-stake network As the market digested the news of a Delay to the difficulty bomb the price Of st eth fell considerably more than That of regular eth As i mentioned a bit earlier there were

Other factors at play in the st market But it’s a decent benchmark nonetheless Another place that you can look for Market estimates of the merge date is on The poly market decentralized prediction Market they have markets on when the eth Merge could actually happen including Before september before october november Etc etc it’s pretty cool Anyways as much as i wanted to see Emerge in august i understand where the Devs are coming from there are still two More test nets gurley and sepolia that Have to complete the merge before it’s Executed on the main net I also think that the reaction to the Difficulty bomb delay was a bit Overblown that’s because according to Tim baco a senior eth researcher he was Pretty confident that the merge would Happen before the end of the year short Of quote multiple unforeseen bugs Okay so all this begs the very important Question When merge Well last week we got our best Indication of that yet that’s because The eth devs tentatively put a date in The calendar for the mainnet merge That date is the 19th of september and While it isn’t final it is the first Time that the devs have ever felt Comfortable putting an actual date on The event

This news sparked renewed optimism in The ethereum community and eth’s price Reacted accordingly In the days that followed it rallied by Over 30 percent You can also see how the market digested The news with the st to eat ratio over The past few days it appears to have Been closing the gap i.e traders are More bullish on the upcoming merge It’s not only the price though that Seems to be flashing some bullish Signals you also had the news in one of Coinshare’s latest reports that Institutional eth interest has turned Positive That’s because they’d seen significant Fund flows into ethereum based products For three consecutive weeks And over the past week we saw 7.6 Million dollars of inflows to eth Products while at the same time bitcoin Based products saw 1.7 million dollars Of outflows Now of course there are many who think This rally was nothing but a ruse a fake Out that risks bringing some people in On fomo One of these skeptics was peter brandt Who is a pretty well-known trader He claimed that the rally came on light Volume which means the thrust didn’t Come from strong hands so make of that What you will

But short-term technicals aside many People are bullish on the prospects of Eth post merge and that comes down to a Number of factors The first and perhaps strongest bull Case for eth post merge is of course its Tokenomics now i know that it’s an Increasingly tired cliche but Post merge eth really could become quote Ultrasound money this is something we’ve Been banging on about for over a year Ever since the implementation of eip 1559 the eth burn has been a hot topic According to most calculations post Merge eth will become deflationary You can even simulate the merge over Here on ultrasound.money Here we can see that the supply growth Will be minus 0.4 percent post merge Now i know many of you are tired of this Argument but you really have to Appreciate the long-term implications of A decreasing supply for the value of eth The case is made even stronger at a time When inflation is running at 9.1 percent In the u.s that’s if you even believe The official stats There are very few monetary assets out There that are natively deflationary so That’s the tokenomics argument Then you have to consider the fact that Eth will become a more attractive asset From an institutional investor Perspective allow me to explain

Firstly as the merge will be moving Ethereum to a proof-of-stake consensus Mechanism it will make eth less energy Intensive to mine By some estimates this could lead to an Energy use reduction of 99.95 What this means is that it will sidestep All of the regulations and negative Press that proof of work Cryptocurrencies namely bitcoin are Getting Now i know that these attacks on proof Of work mining are dubious and i’ve Talked about this fake fud numerous Times on the channel before However we cannot deny that this Narrative exists And it has become the public narrative To such an extent that it’s keeping Institutional investors at bay We know they have these esg mandates and These are excluding bitcoin on Environmental grounds So Once ethereum has transitioned to proof Of stake it eliminates that argument and Makes eth more attractive to these Investors Then you also have the fact that once The merge has been successfully Implemented you have a lot more Certainty around the future of ethereum All those large and prudent investors Who were worried about potential tail

Risks and issues around the merge are More likely to consider it now If they were going to start staking There will also be more certainty around When they can withdraw their eath And while we’re on the subject of Withdrawing eth it’s important to clear Up some misconceptions around staked Eath Contrary to popular opinion once eath Has transitioned to proof of stake Stakers won’t be able to immediately Withdraw their coins They’ll have to wait for a separate Upgrade that will come a few months After the merge That was confirmed by senior devs like Tim baker so that should assuage the Fears of people who think we could see a Massive dump of eth come the merge You should also note that once the Upgrade has been pushed to allow these Withdrawals users won’t be able to Withdraw all at once That’s because there’ll be a limit on The exit rate of the validators this Will be done in order to make sure that The change in the validator set isn’t Too rapid Now if that all sounds like greek to you I’ve linked to this reddit post below That explains it in more detail So we’re unlikely to have a flood of Withdrawn eth hitting the market and

That is if you even assume that more People will want to withdraw than we’ll Want to stake as i mentioned earlier Institutions and those who have been Sitting on the sidelines may be lining Up ready to stake come the merge You can’t say it will be a net Withdrawal Okay so that’s the bull case but what About the bear case Well we have to start with another Misconception around the merge and that Is that it could help the ethereum Network scale This isn’t the case It’s not a scaling upgrade but a Consensus mechanism upgrade the scaling Benefits faster transactions lower fees Are likely to only come once the Sharding upgrades have been pushed this Means that using ethereum is likely to Still result in the same issues around Speed and gas fees that have some users Tearing their hair out The wider layer 1 landscape is also not Without competition some really Impressive smart contract chains such as Avalanche near solana cardano etc They’re all working to lure frustrated Ethereum users to their networks Even assuming that the merge goes off Without a hitch many ethereum users Could still become incredibly frustrated With the scaling issues

This is especially the case given the Misconception that the merge could be a Panacea for all the issues ethereum Still faces So there’s that Then there’s the risk that the merge Could be delayed again Yes the devs have placed a date in the Diary but they’ve also stressed that It’s not final There are still two more test nets that Have to complete the merge and if there Were to be a number of bugs discovered Then this could push the merge back yet Again But that’s perhaps of lesser concern Than the chance of something going Horribly wrong come the merge itself While the devs are taking every step Possible to test the merge before Deploying it on the main net there is Always a risk that something unforeseen Could happen It’s hard to hedge this scenario and if It does happen it could have a Cataclysmic impact on the whole crypto Market It’s not likely but you can never ever Say that something is guaranteed And finally another argument for the Bear case is just the broader macro Environment it is not likely to improve Anytime soon and risk assets like stocks And crypto are not going to be

Recovering until the fed’s rate hiking Cycle is complete I talked about this in much greater Detail in my video about how long the Bear market could last that is in the Description Basically the fed is not slowing its Rate hikes anytime soon and after the July meeting fed officials are going Away for a two-month holiday it’s all Right for some isn’t it That means that if inflation continues To climb entirely possible then they Will have to come back from their Two-month recess and pump those rates Even more it doesn’t matter if you hold Eth bitcoin or stocks in this macro Environment cash sadly seems to be king And that’s it for most of the video but Time for some of my own thoughts on eth And the merge Now i will categorically state that i am Of course no financial advisor clearly So whatever i say now is my own opinion And i would encourage you to talk to Your financial advisor before making any Investment decisions That said i think we are pretty likely To see an eth merge this year That’s based on the fact that the devs Are comfortable enough to put it in the Diary for september Even assuming there were one or two bugs And it was pushed back again there are

Still three months as a buffer for the Remainder of the year When the merge does finally occur we’re Likely to see a rally in the price of Eth we can also see st eth approach Parity with eth as investors arbitrage The difference when the unlocked staked Eth could be sold at a profit As eath supply starts to decrease and Holding demand equal the natural supply Demand dynamics could be price accretive There may be a short-term retracement Though as people sell the news on the Event they’ll be focusing their Attention on the next upgrade which will Allow the staked eth to be withdrawn and The upgrade after that which will bring Sharding to the network Of course this really depends on what Happens in the macro environment over The next few months That is still gloomy and there are other Risks that lie beneath the surface see My video on chinese bank runs for Example But these are not ethereum specific and I am holding eth for the long term I’m bullish on the technology and the Transformative power of d5 The recent collapse of all those c5 Crypto firms further reinforces that Belief it’s that perspective that allows Me to huddle for the long term Well i hope you enjoyed that video i

Would love to get some feedbacks from You folks though so when do you think we Could see the merge what other layer Ones are you bullish on i’d love to know Now if you want to get more of me then i Encourage you to follow my twitter Telegram tik tok and instagram there’s a Bunch of content that you’re missing There You’ll also have to subscribe to my Weekly newsletter it’s here that i share My personal portfolio as well as a Breakdown of the videos that i have Coming up the links to all of those are In my socials page below finally if you Found this video helpful slap a like on It subscribe and ping that bell as well To make sure you never miss another one Time’s up for this crypto guy but i will Be seeing you guys very soon till then Stay cool stay safe and Stay crypto [Music]

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