February 5, 2023

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With the recent confirmation of the upcoming Ethereum Merge by Vitalik Buterin himself, the whole crypto community started buzzing with rumors and speculations. The “Big Flipping” is something many discuss quite seriously. Many analytics and experts also add wood to the fire by talking about the value of the Ethereum network to the future of crypto projects in general.

What happened?

The 15th of September, 2022 is the expected date of the merge based on Bordel.WTF, but the exact date may change depending on the total hashrate. It seems that Vitalik Buterin is right and many people in the community agree with his assessment. Mainnet and Beacon will become one which is a big deal for the whole industry.

What does it mean for the market? Some believe that the market will “flip” meaning that ETH will overtake BTC in market cap. Since Ethereum is considered the main platform of choice for the vast majority of emerging crypto projects, enthusiasts and informed tech experts think that it will eventually help ETH to take a bigger share of the cryptocurrency market.

The contrary point is that many institutions are heavily invested in ETH and may dump their holdings on September, 16, the day after the merge. Many continue speculating about the possible effects of what a severe reduction of new supply will do to the market. While some believe that it will work like a deflationary mechanism and pump the price, others maintain the position that many institutionalized investors will try to liquidate their ETH-adjacent assets as quickly as possible.

What should you know about the merge?

Many think that the gas fees will reduce by the magic of friendship between network communities. However, the only distinct change that will happen is that the consensus mechanism will be different. Currently, the ETH network uses the PoW (proof-of-work) method, but the merge will change it to PoS (Proof-of-stake). To reduce gas fees, the network must increase its throughput and capacity which is not guaranteed to happen.

Another thing that creates hype is that the merge will increase the speed of transactions which is, again, not a guarantee. The merge will speed up the block publication by about 1/10th of the current speed. It is barely a noticeable change for end users. The good thing is that the whole process will be mostly seamless without significant downtime for the network.

These two misguided ideas that continue spreading in the community are important drivers of price growth. One should remember that market predictions tend to be more optimistic during bullish movements. Right now, the conditions for the perfect storm are here: big expectations based on speculations and massive pumping that may result in an epic crash.

The FOMO is strong!

Giving up to the FOMO is not the brightest idea in these trying times. ETH was pumped strongly by the news about the merge and received noticeable bumps reaching $2020 on August, 14. Many started believing that there is no going back and the hype train will carry the price to “the moon”, but it is unlikely that the trend will continue to be directed upward without any hiccups.

The fear of missing out is one of the greatest enemies of any investor. Many inexperienced buyers of crypto coins often face challenges when choosing the right moment to enter the market. Right now is not the best time for novice traders who may not understand all risks related to buying at the current price (it nearly doubled since July, 14).

Many ignore many red flags and buy into the hype creating a wonderful environment for the catastrophic downfall of the ETH token. Harsh market realities say that there will be no “big flipping” in the nearest future. Those who want to invest, should think long-term and be careful when buying into the hype caused by the upcoming merge.

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