In this post-merge world, many folks are asking “If it was so important to the future, then why did Ethereum crash after its move to proof-of-stake?” To fully answer this question, we first need to consider who was holding Ethereum and what they were expecting to happen. According to Tello, “There were a lot of whale holders that have had Ethereum for a long time. They were expecting the general populace to invest and while they were investing, they were actively selling.” The actions of those looking to make a quick turnaround created massive buyer tension. Buyer tension can cause prices to fall. Many publications and crypto influencers overhyped the immediate effects that the merge would have on the Ethereum network. Ethereum’s move to proof-of-stake is a long-term move, not short-term.
For these reasons, Tello hypothesized that “it may have been better for Vitalik to randomly one day just ‘POP’ and it happened,” as this would have prevented the whales and influencers from being able to speculate and hype up the merge. Instead, everyone knew it was coming in September. Everyone watched the slow increase in price leading up to the Merge. Those who suffered losses in the bear market thought they saw an opportunity and cashed out their Ethereum.
What the Future Holds
Although there was a drop in price immediately after the introduction of proof-of-stake to the Ethereum network, there is still a sentiment that the long-term effects will outweigh short-term losses. In terms of the future market, Fannie Mae and Freddie Mac have announced that they expect interest rates to lower to the mid-fours next year, allowing investors more freedom. Midterm elections are coming up in November, which historically has had a positive impact on the stock market, which is essentially in line with the crypto market. Tello said that from what he’s seen, “there’s a possibility of additional money printed and injected into the United States macroeconomic environment.” This type of influx could contribute to a rise in both stock prices and crypto prices, possibly triggering another bull market.
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