Ouch! The markets are bleeding red as the newest inflation numbers are set to be released. Will they be high again? Obviously, but not all is lost; one of the most significant events in crypto history is months away. Allegedly.
All that and more!
TL;DR:
- Ethereum 2.0: The Merge.
- Gripping price action in ETH/BTC chart.
- Uniswap branches out.
- NFTs: BAYC film?
The Ethereum Merge: The most significant bull catalyst since the Bitcoin halving
The markets have been seeing mixed action since the Federal Reserve (Fed) began cutting rates and lowering its balance sheet, but there’s a significant catalyst dead ahead, one that may be as significant as the Bitcoin halving.
Bitcoin halvings historically occur before major crypto bull runs. There’s a major reason for that: The market feels it when you cut the supply issuance of the largest crypto asset in half.
When Bitcoin initiated its latest halving event in May 2020, the marketcap sat at US$166 billion. But this summary isn’t about Bitcoin. Instead, it’s about Ethereum’s upcoming Merge and the bullish updates to the chain.
Ethereum’s current marketcap is more than twice as large as Bitcoin’s in 2020, and Ethereum is about to incur the equivalent of three issuance halvings in one instance.
Ethereum updates have historically been slow (and often delayed). Still, things look promising this time around, and the devs are moving along steadily, with the merge date not far from being announced.
So what’s the big deal? What happens when the home of decentralized finance (DeFi), 55% of all total value locked (TVL), and some 5000-plus tokens merge to Ethereum’s proof-of-stake (PoS) mainnet?
- No more miners, as the chain moves to a PoS consensus.
- No more miners means less selling pressure, because validators are cheaper to run than mining equipment and electricity needs.
- ETH staking on Ethereum validators at a 8-11% annual percentage yield (APY) rate. Higher APY means more reason to own and stake ETH.
- ETH issuance will reduce by 90%, because the network will be cheaper to secure. With the EIP-1559 update, the network now burns ETH used as gas. As a result, the demand vs. issuance structure will flip, and ETH will become a deflationary token.
- Ethereum becomes environmentally friendly; ESG compatible.
Imagine three halvings in one, plus some added benefits like a sweet 8-11% staking APY. The issuance reduction will dissipate millions of dollars’ worth of daily sell pressure in ETH from miners. Moreover, when Ethereum becomes environmentally friendly, companies will be able to invest in ETH without the environmental, social and corporate governance (ESG) mandate pressure.
So, if you believe in Ethereum and its devs, The Merge might be the most prominent catalyst crypto has seen since Satoshi rolled out the Bitcoin network in 2009.
Market update 🌍
All major markets felt the loom of today’s CPI number, but crypto significantly felt the sting. Bitcoin (BTC) fell below US$40,000 for the first time in nearly a month, and has come in contact with the uptrend mark (blue) that, if broken, could signal further trouble. BTC finished the US session down -6.30% to US$39,500.
Source: Trading View
The ETH/BTC chart showed gripping price action near the close of the US trading session as traders aggressively exited BTC in favor of ETH – Just noise, or did traders see the opportunity to enter ETH ahead of the Merge?
Source: Trading View
| US markets close | Gain |
| S&P 500 | – 1.69% |
| Nasdaq | – 0.59% |
| Dow | + 0.44% |
| VIX | + 15.07% |
Notable losers (24h)
| Protocol (Coin) | Price ($) | Gain/Loss (%) |
| Mina (MINA) | 2.54 | -14 |
| Convex Finance (CVX) | 29.82 | -13 |
| THORChain (RUNE) | 7.77 | -12 |
| Zcash (ZEC) | 143.95 | -12 |
| Arweave (AR) | 30.28 | -12 |
| Xido Finance (XIDO) | 28.48 | -15 |
| Telcoin (TEL) | 0.006 | -15 |
| Render (RNDR) | 2.04 | -15 |
| Metis (METIS) | 78.30 | -17 |
| Bitcoin Fear and Greed Index | 32 Fear (-2) |
| “Crypto” Google Trends | 32 |
| “Bitcoin” Google Trends | 33 |
Newswatch 📰
- Uniswap branches out. Uniswap Labs, the team behind decentralized exchange (DEX) Uniswap (UNI), has deployed a venture unit for the first time, and looks to invest in startup projects focused on web3. In addition, the team seeks to leverage experience from successfully developing and deploying Uniswap to aid future partners.
- Mastercard meta. Mastercard has filed 15 metaverse-related trademark applications that point towards the company pivoting to a payments system for metaverses. Virtual cards, marketplaces, and non-fungible tokens (NFT) were all included in the trademark applications.
On-chain ⛓
- Fleeing digital assets. After the largest month of capital inflows to digital asset funds in 2022, Coinshares reports US$ -131 million in BTC outflows, the largest outflow since January. Similarly, ETH saw US$ -15 million in outflows.
NFT & metaverse update 🐵
- Fortnite metaverse anyone? Epic Games, the creator of the popular game Fortnite, raised US$2 billion from Sony and the Lego Family to fund its move into the metaverse. Epic Games and Lego announced a partnership last week intending to create a “family-friendly” metaverse.
- Bored Apes Films. Some Ape owners will have another means of profit after Coinbase announces the production of a three-part series titled “The Dengen Trilogy” based on the Bored Ape Yacht Club (BAYC) NFT project. The film will be broadcast during the NFT.NYC conference on June 20-23.
Notable mints:
| Project | Community score | Mint price | Date of mint | Time (UTC) |
|---|---|---|---|---|
| HAKI | 81 | 0.07 ETH | April 10 | 02:00 |
| Supreme Skulls | 81 | 0.08 ETH | April 14 | 02:00 |
| 88 Dynasty | 80 | 0.09 ETH | April 15 | 05:00 |
Banter’s take
Easy come, easy go. As the Fed begins to pull the lifelines in response to rising inflation, markets are getting tighter and tighter. Additionally, tax season isn’t helping prices. Today’s CPI print will garner more information, even though many predict another high number. However, not all is gloom and doom. There is some light on the horizon in the form of the Ethereum Merge. One of the most critical events in crypto’s short history is likely only months away, and if the market reacts as it does to Bitcoin halvings, we better buckle up and hold on tightly.
-Gabri
