Justin Bons believes that investors, traders, and developers are standing at the crossroads of Ethereum.

Justin Bons, the founder and CIO of Cyber Capital, stated that the biggest threat to Ethereum merge is unclear governance. He believes that investors, traders, and developers are standing at the crossroads of Ethereum. He believes that social slashing can create similar censorship issues that it intended to fight. The merge changes Ethereum’s consensus mechanism from proof-of-work to proof-of-stake.

Proof-of-stake depends upon validators to verify transactions and them to the blockchain. The validators stake a specific amount of native token, which is slashed in case of dishonest behavior. For Ethereum, the amount staked is 32 ETH.

According to a weekly report from the data provider Kaiko, ether’s steep price plunge on Friday brought a swift decline in open interest on derivatives – contracts that traders used to make leveraged bets on the cryptocurrency’s future price. Many traders had their derivatives trades liquidated, or wiped out due to margin calls, according to Kaiko.

But on Monday, money flooded back into the ETH futures market, the data provider found.

“As the price dipped below $1,600, we observed a significant spike in open interest,” Kaiko wrote.

 

Ethereum Merge

The Ethereum Merge, a long-awaited upgrade that will complete Ethereum’s transition from a proof-of-work (PoW) to a proof-of-stake system, is set to take place in September. In addition, The Merge will transform Ethereum’s monetary policy, making the network more environmentally sustainable and reducing ETH’s supply. Experts believe that after The Merge, Ethereum will have lower inflation than Bitcoin. Especially with fee burns, Ethereum will be deflationary while Bitcoin will always be inflationary. For Ethereum Classic, this merge provides a key catalyst, at least in terms of interest. Often looked at as Ethereum’s under-loved and under-respected sibling, Ethereum Classic is a fork of the Ethereum blockchain that came about as a result of an internal dispute among developers within the Ethereum team. Ethereum classic will remain proof-of-work, and as such, is now being viewed as a haven of sorts for Ethereum miners looking to pivot.

 

Impact of Ethereum Merge on ETH’s Price Actions

Ethereum, the second-largest cryptocurrency by market capitalization has been constantly spiking, reaching its highest price in a month as the network ‘merge’ fast approaches. Nevertheless, the investment community is still in shock, as they are troubled by rising inflation and a looming recession, and investors continue to sell off riskier assets like equities and cryptocurrencies. They also have in their minds that Ether is down over 70% since its all-time highs of US$4.8k in November 2022. But right now, the token is pumping again, giving new hopes to some of the most skeptical investors in the market.

Developers have been working on this upgrade for quite a long time. The protocol will make Ethereum almost 99% more energy efficient. Investors and analysts are bullish on the new perspectives that the Ethereum Merge upgrade has to offer. Experts believe that if the growth of the ETH supply is curbed, while the demand for the crypto is still high, then that may have a positive impact on its price. Paired with the emerging merge upgrade, it might provide Ethereum with the perfect opportunity to overtake Bitcoin and take over the reins of the crypto market.

 

So, when should you buy Ethereum?

Based on expert perspectives, Ethereum 2.0 is supposed to establish a stronghold for the crypto in the Defi and Web 3.0 industry, leaving little room for Bitcoin to reign as the largest cryptocurrency in the world. There are plenty of assumptions revolving around the market that depict the Merge upgrade will fail to appease investors, but its current price rally proves quite otherwise. According to Hayes, ETH is currently providing massive investment opportunities for buyers, hence, now will be a good time for investors to buy and hold the token to generate massive amounts of profits in the future.