As Bitcoin Plunges Below $19,000, Cryptocurrency Hopes Pin on Ethereum ‘Merge’

Ethereum’s long-awaited “Merge” is set to launch next week, but even that might not be enough to stop the bleeding out of Bitcoin and the rest of the crypto market.

Bitcoin is driving down the cryptocurrency market.

As is tradition in the cryptocurrency market, September got off to a rocky start for bitcoin and all cryptocurrencies.

BTC (Source: CoinGecko)

The world’s leading cryptocurrency extended its losing streak for weeks, dropping below $19,000 for the first time since the crypto market liquidity crunch event in June. Bitcoin is trading at around $18,730 today, down 5.8% on the day. It is currently over 70% of its November 2021 peak.

The latest bitcoin crash has hit stocks like Ethereum, BNB, Cardano and Solana even harder, leading to an overall market decline that has brought the global cryptocurrency market capitalization below $1 trillion. .

After the explosion of Three Arrows Capital and the subsequent collapse of cryptocurrency lenders like Celsius and Travel Digital, the cryptocurrency market showed signs of recovery over the summer. Ethereum and other assets have jumped more than 100% since the June low, helped in part by slowing inflation rates and the relatively conservative measures of the Federal Reserve, but the market’s bullish momentum has came into question in mid-August when Bitcoin failed to break above $25,000. (On Aug. 26, Crypto and other asset classes took a big hit after Fed Chairman Jerome Powell warned of new “pains” for the markets in a speech in Jackson Hole; he reiterated that the US central bank hopes to bring inflation down to 2%).

Can the merger save the market?

September has historically been a weak month for cryptocurrencies, and the past week has seen the market extend its late summer slump. Over the past few weeks, traders have considered the next ” merger of Ethereum to Proof-of-Stake as a possible catalyst for a recovery, helping Ethereum and other related assets like Lido and Ethereum Classic to soar. Considered one of the biggest crypto events in recent years, the merge kicked off in earnest on Tuesday with the successful activation of Ethereum’s Bellatrix upgrade, while the main event is expected to take place in about a week. . Yet, with bitcoin falling, Ethereum and other assets have taken a big hit. Despite its summer run, ETH is trades at $1,508 currently, around 69% below its all-time high.

With Bitcoin accounting for around 36.5% of the total cryptocurrency market capitalization, cryptocurrency devotees are hoping that interest in the top cryptocurrency will return as it did for Ethereum in the summer course.

The merger is expected to improve Ethereum’s energy efficiency by 99.99% and reduce ETH issuance by 90%, but these changes will not directly impact bitcoin. In fact, an Ethereum Proof-of-Stake is likely to expose Bitcoin’s reliance on a highly energy-intensive Proof-of-Work consensus mechanism, which Elon Musk and several large institutional players have pointed out as a point of concern in 2021. Bitcoin has lost ground to Ethereum in recent weeks, leading the second crypto’s leading proponents to call for a “flipping” in which the market capitalization of Ethereum would exceed that of bitcoin.

The hopes offlipping“Might wait a while, however while Ethereum fundamentals have never looked stronger, ETH has rarely emerged unscathed from BTC’s biggest crashes in the past. With a crypto bear market for nearly a year and lingering macro fears such as interest rate hikes and the European energy crisis still scaring investors, it’s hard to see how the market will ever turn around. rise steadily over the next few months. The latest crash proves that even the biggest crypto event in years might not be enough to instill confidence in avid followers in this space.

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As Bitcoin Plunges Below $19,000, Cryptocurrency Hopes Pin on Ethereum ‘Merge’

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