Ethereum is speculated to witness a short plunge in value right after the Merge launch

Ethereum Merge has been making strides in the crypto market for the past six years. When the Goerlitestnet was successfully deployed, Ethereum’s value rose by leaps and bounds. Ethereum’s tradition to the PoS consensus mechanism is perhaps the most anticipated event in the crypto world. It is expected to slash ETH’s energy consumption by over 99 percent and enable it to scale to its full potential. However, the Ethereum Merge has created several controversies about the future prospects of ETH and its price movements. For the time being, key indicators predict that the Ethereum price will explode after the Merge upgrade is launched. But as Ether developers declare a probable date for the launch of ETH 2.0, experts predicted that the futures market is expected to slip, which is basically an unperceived condition in which futures trade below spot prices, meaning ETH might weaken in the coming months.

They go on to say that the condition might be short-lived, the futures market will probably flip back to trading at a premium after the upgrade, a situation which is also known as contango. The Merge is slated to happen in mid-September and investors are scared that the value of the cryptocurrency might dive soon. Ether fanatics expected that after the upgrade, Merge-focused trades will likely increase, but since there is a backwardation predicted, investors buying ETH spot and futures will likely become riskier assets. There have been other Ethereum miners who have pushed back against the blockchain’s transition, proposing to split the main ETH chain and continue the current PoW chain, and if they manage to do that, those opting to stay under the current consensus protocol will likely face less blow when the value of Ethereum plummets.

Ethereum went through a big sell-off in the past week as investors have already started booking their profits since mid-August which triggered the recovery rally. The second largest cryptocurrency by market cap triggered a price rally for almost all major cryptocurrencies. ETH’s transition to the PoS consensus mechanism is a massive move, and there might be several complications related to that. It is bound to find opposition from skeptics, but the number of backers seems to outweigh the number of critics.

Bottom Line

Anybody with a basic understanding of Ethereum Merge will know that the protocol will increase the transaction speed, reduce gas fees, and triple the earnings via crypto staking. Expectations are high with the Merge upgrade. Its price is expected to skyrocket despite being in a bear market condition. Currently, all that investors need to care about is investing diligently without making any rash investment decisions.