Key points to remember
- The ETH:BTC ratio hit a 2022 high of 0.084 early Tuesday.
- Ethereum outperforms Bitcoin as “the meltdown” nears.
- The first stage of blockchain Proof-of-Stake update number two is expected to go live today.
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The ETH:BTC ratio hit 0.084 on Tuesday.
Ethereum rallies against Bitcoin
With “the meltdown” just days away, Ethereum is racing against Bitcoin.
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Data from TradingView shows the ETH:BTC ratio hit a 2022 high early Tuesday, breaking above 0.084 for the first time since December 2021. The ETH:BTC ratio jumped around 58% from around 0.053 in mid-July. . The “ratio” refers to the cost of 1 BTC in terms of ETH. With a ratio of 0.084, 1 BTC is worth approximately 12 ETH.
Ethereum enthusiasts have discussed the ratio at length in the past in tandem with “the rollover”—a hypothetical event that would see Ethereum overtake or “reverse” Bitcoin’s market capitalization. The ETH:BTC ratio exceeded 0.1 in June 2017 and January 2018, but for the reversal to occur, it would need to reach around 0.159 based on the current circulating supply of both assets (as supplies in ETH and BTC coins adjust over time, the ratio also changes).
Ethereum’s current lead against Bitcoin can be explained by the growing hype for the merger, the long-awaited Proof-of-Stake upgrade of the number two blockchain. The fusion is expected to ship between September 13 and 15, and the first part of the event is happening today. Dubbed Bellatrix, the first stage of the upgrade will see Ethereum update its consensus layer ahead of the merger itself. The second phase, known as Paris, will then end when the terminal’s total difficulty threshold reaches 5875 trillion, trillion, marking the difficulty required to mine the final block under proof of work. After that, all new Ethereum blocks will be added to the chain by validators staking ETH.
The market is waiting for the merger
After suffering from years of delays, the merger is set to be the biggest crypto event of 2022. It is expected to bring several major changes to Ethereum, including a 99.99% reduction in power consumption and a 90% reduction in of ETH issuance. This is partly why ETH has rallied in recent weeks. Such is the interest surrounding the update that many Ethereum-adjacent tokens, including Ethereum Classic’s ETC and Lido’s LDO, have rallied around ETH over the past few weeks. Ethereum Classic benefited because miners move to the network before they become obsolete on Ethereum; its hashrate hit an all-time high on Monday. A group of proof-of-work advocates also plan to fork Ethereum to create a new network that maintains a hub for miners. Known as EthereumPOW, the initiative is expected to follow the merger and could potentially lead to a token airdrop on the new chain for ETH holders. Several major exchanges, including FTX and Binance, have confirmed their intention to support airdrop in addition to merging.
According to data from CoinGecko, ETH was trading at $1,664 at press time, up around 6.2% in the past 24 hours.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.
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Ethereum/Bitcoin Ratio Hits 2022 High During Merger
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