Concern Grows: How Ethereum Merge Will Impact Bitcoin?

As the Ethereum (ETH) Merge update approaches, data reveals that the critical Bitcoin (BTC) metric is sounding alarm.

Merge: Bitcoin Dominance Sounds Alert!

Bitcoin is a long way from its all-time high of $68,800. BTC is currently trading at $ 22,230. Bitcoin supporters claim that macroeconomic conditions and the liquidity crisis in the market are behind this decline. However, according to analysts, another development that has been causing concern in recent days is that the Bitcoin Dominance rate has fallen to alarming levels. Cryptocurrency journalist and researcher Laura Shin emphasizes that the BTC Dominance rate is at 38%. The critical metric has dropped to such lows only a few times in Bitcoin's history. According to the analyst, Bitcoin's dominance in the market is decreasing as the Ethereum (ETH) Merge update approaches.

As the number of cryptocurrencies on the market increases, so does the competition for Bitcoin. Bitcoin is receiving a lot of criticism for its proof-of-work (PoW) mechanism and energy consumption. Using the same mechanism, Ethereum will have revolutionized the proof-of-stake (PoW) system. Energy consumption is expected to decrease by 99 percent. According to Shin, Ethereum has taken a few steps ahead of the competition thanks to Merge.

Institutional Investor Will Turn To Ethereum

Bitcoin supporters argue that proof of work is the only mechanism that secures the decentralization of a blockchain. In fact, Ethereum is receiving a lot of criticism for potential centralization and censorship issues after the Merge update. Justin Bons, the founder of Cyber Capital, believes that BTC is behind the times compared to its competitors. The executive believes that the principles of censorship resistance and decentralization are more valued by Bitcoin's competitors. The expert also criticizes BTC's lack of composability and programmability compared to other cryptocurrencies. Bons also thinks that Bitcoin's long-term security model has been broken.

According to Bons, BTC's failure began in 2017 due to a number of poor governance options. Ethereum is the closest competitor to BTC in terms of market dominance. However, there is a high correlation between the dominance of Bitcoin and Ethereum. With Bitcoin's decline, Ethereum's dominance has also waned. The data also reveals that Cardano (ADA) has also received great attention thanks to the Vasil Hard Fork. According to the Chainalysis report, institutional investment is expected to move towards Ethereum, mainly due to the staking rewards and energy issue. This is a major catalyst for ETH price in the long run.

Source: coin-turk.com