Ethereum is among the strongest cryptos of 2021, its price climbing more than 437% since the start of the year. It is also one of the more expensive cryptocurrencies, valued at just under $ 4,000 at the time of publication.
Further, Ethereum’s upgrading process to Ethereum 2.0 has been in progress throughout 2021, and will continue into 2022. The Altair upgrade was activated on the main network on 27 October. The upgrade to the Ethereum Beacon Chain tests the transition to proof-of-stake (PoS) block mining.
Finally, the Ethereum backbone will merge with the Beacon chain in 2022, to complete the Ethereum 2.0 upgrade.
An overlooked factor
Macro investment strategist Lyn Alden opined in an interview, that the aforementioned “under-the-radar” catalyst could boost ETH in the coming year, adding,
“The thing I’m looking at is the Ethereum foreclosure contract. They started the Beacon chain about a year ago, and they’re doing this staking contract, and it’s one-way. Once you’ve locked the pieces, they’re there until something changes or until a merge happens.
She further stated, “Bitcoin’s coming off exchanges pretty rapidly, but Ethereum’s coming off exchanges even a little bit more rapidly partly because it’s going into that contract,” adding, “…you have an illiquid supply forming and as long as that persists, that’s a pretty strong bullish variable.”
According to distributed ledger explorer, Etherscan, crypto investors blocked 8,808,738 ETH worth $ 35 billion in the smart contract. Those who deposit their ETH in the smart contract seek to be validators of the next iteration of Ethereum
And after that?
That said, the executive is slightly concerned. Here’s why.
“I think that once that gets merged and unlocked, that could be a liquidity event. Some of those coins have pretty sizable profits, and some people might want to take profits off the table. I’d be more uncertain after the Merge.”
She further mentioned,
“Ironically, this could be one of those selling news events, where a lot of anticipation builds up, and then maybe it’s kind of a catalyst to calm down for a while.”
Therefore, a sell-off event could take place.
Overall, it’s fair to say that the merge is a highly-anticipated event for Ethereum. Different analysts have had their hopes high for the same. At press time, ETH has been trading below the $4,000 mark for quite a while now. Whether the merge will impact it’s value positively, remains to be seen.
