Sentiments of the Market and Crypto Community towards the Ethereum Merge

[TL; DR]

🔹 The Ethereum community is happy about the Merge as it lays a foundation for future upgrades which will eliminate the current challenges of high transaction fees and low speed.

🔹 The international crypto community hails the Merge for reducing the energy consumption by 99.95%.

🔹 Analysts believe that the price of ETH will increase in the future due to the deflationary nature of ETH.

🔹 The Merge should lead to greater adoption of ETH and other cryptocurrencies.





Introduction

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The Ethereum Merge went live on 15 September 2022 to the delight of thousands of crypto fans and experts. The Merge, which the ethereum block 15537393 confirmed, had no hiccups and post-Merge challenges to date, ensuring the shift of the blockchain from the proof-of-work consensus (PoW) mechanism to the proof-of-stake (PoS) one.

Soon after the success of the Merge many prominent people in the crypto industry congratulated Ethereum for this milestone. Even Vitalik Buterin, the co-founder of Ethereum frankly commented that it was a great achievement for the community and the entire decentralized space. As such, he congratulated the developers for the success of the Merge.

Sandeep Nailwal, the co-founder of the Polygon blockchain, was among the first prominent persons to appreciate the Merge and wished the team a better future. Due to its expected contribution in the crypto world, Nailwal said that a new era has begun in the “PoS world.”
The Founder of ShapeShift, Erik Voorhees, said that the Ethereum Merge is the most influential and important event in the history of cryptocurrency, apart from the launch of bitcoin in 2009.


Why the crypto community is celebrating

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The people who are celebrating the launch of the Ethereum Merge are not only its users. Many personalities around the world have shown their support for this development. Even many crypto entities like Yuga Labs, the organization behind the popular NFT series Bored Ape Yacht Club and CryptoPunks, recognizes the contribution the Ethereum blockchain is making in the blockchain ecosystem.

There are various reasons for the optimism surrounding the Ethereum Merge. For instance, the fact that Ethereum PoS will reduce the blockchain energy consumption by about 99.95% is good news to the entire world. Since stakers are responsible for validating transactions there is no need for mining ETH, which uses much energy.

The fact that Ethereum is now using less energy increases its reputation. Hayden Adams, the founder of Uniswap Labs said that the reduction in Ethereum’s energy use helps to improve the network's public image,” and “entire history.”

To this effect, Co-founder of CoinSwitch Ashish Singhal, said, “Ethereum’s transition to a greener and energy-efficient blockchain will, in the long term, be beneficial for the adoption of the technology among enterprises and institutions.”


The Merge Will Lead to Greater adoption of Cryptocurrencies

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Many analysts and prominent individuals in the crypto sector believe that the Merge will result in greater adoption of ETH and other cryptocurrencies. They think that Ethereum has set a good example of going green and luring other investors into the sector.

BuyUcoin CEO, Shivam Thakral, said, “The Ethereum Merge marks the beginning of energy-efficient crypto operations, which will help drive mass adoption of crypto-related products and services. We can expect similar initiatives in the future to provide a level playing field to the crypto industry around the globe.”

Brad Garlinghouse, the CEO of Ripple Labs commented, “Truly incredible technological feat.” He added that it is a huge step for Ethereum to lure its “first billion users.”


The Merge and ETH Price

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Although the price of ETH plunged down following the launch of the Merge, analysts say that this is just a short term phenomenon. They believe that the real impact of the Merge on the price of ETH will be in the long run.

The co-founder of Mudrex, Edul Patel, said that the “Merge may not show any significant impact on the price action of Ethereum now, as investors often take some time to react to such significant events in the market. But there are chances that ETH might surge to the $2,000 level in the coming days.”

A crypto lead at CoinSwitch, Parth Chaturvedi said, “"There's a 'Triple Halving' of ETH supply and the asset is now deflationary.”

The other contributing factor to the deflationary pressure of ETH is the staking mechanism and yield. It will reduce the cryptocurrency circulating supply which is likely to push its price up. Commenting on this, Minal Thukral of CoinDCX said, "As the chain will now run-on locked ETH, the net amount of ETH in supply/circulation is decreasing and we should see that getting priced in the times to come."


Some skeptics

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Well, not everyone would agree no matter how good a thing is. There is a section of the community that is skeptical about the impact of the Merge on ETH and the crypto community.

One such view point came from an independent journalist, Jordan Schachtel, who believes that the Merge will put the Ethereum blockchain and ETH under the control of wealthy people. He said that this transition from PoW to PoS makes ETH a “WEF (World Economic Forum) coin” which “by design, puts all value and control in the hands of the people at the top.”

The failure of the Merge to address the key challenges the Ethereum network is facing such as high transaction fee and limited speed is a cause of concern for a cross-section of the Ethereum community. There is recurring condemnation of the Merge on social media platforms due to these unresolved issues.

For example, Cardano followers have raised the issue of ETH’s high transaction fees as indicated in the following Tweet.

Community Sentiments Come Through Tweets and Memes

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The best way to understand the feelings and perception of the crypto community is to follow the members’ posts on social media platforms, mainly Twitter.


The Future of Ethereum

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The crypto community believes that the future of ETH and the Ethereum blockchain is bright. The reason is that the Merge lays a foundation for other upgrades including sharding which will eliminate the issues affecting the users.

The CEO of KuCoin, Johnny Lyu, said, “"It [Merge] will form the basis for a range of future updates and enhancements to the Ethereum system. On the other hand, the Ethereum network updates have repeatedly been accompanied by unexpected technical problems, and this time not everything may go smoothly.”


Conclusion

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The crypto community and market are receptive to the Ethereum Merge as it is likely to bring many benefits both in the short term and long term. The reduction in energy consumption is one of the greatest contributions of the Merge to the Ethereum blockchain. Other benefits, like low transaction fees, will come with future upgrades.



Author: Mashell C., Gate.io Researcher
This article represents only the views of the researcher and does not constitute any investment suggestions.
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