Main navigation

Here's One Thing That Could Push Ethereum (ETH) Price Higher

Fri, 09/02/2022 - 20:36
article image
Alex Dovbnya
BitMEX Research claims that the upcoming merge upgrade could make Ethereum staking more attractive
Here's One Thing That Could Push Ethereum (ETH) Price Higher
Cover image via www.freepik.com

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Read U.TODAY on
Google News

In a recent thread, an investment research analyst at cryptocurrency derivatives exchange BitMEX argues that the main reason why Ethereum’s upcoming transition to proof-of-stake may be potentially positive for the ETH token is that it will become more attractive for yield-hungry investors.

Ethereum staking became possible with the launch of the beacon chain back in December 2020. Those who choose to stake their ETH tokens can earn yields that are currently sitting around 4%.

The analyst believes that the merge is likely to boost staking yields since some of the fee income will go to stakers. This will make the idea of earning passive income by staking Ether more enticing.    

Related
Ethereum May Extend Losses Below $1,000: Bloomberg

So far, staked tokens are locked up, and investors won’t be able to withdraw them immediately after the upcoming merge upgrade. That said, Ethereum’s long-anticipated transition to proof-of-stake will instill more confidence in stakers who plan to sell their tokens in the future. Hence, more investors are likely to stake after the merge.

Moreover, as BitMEX Research notes, more Ethereum-based investment products are may choose to provide yield after the upgrade.

At the same time, the analyst argues that deflationary dynamics and the dramatic decline in energy consumption will not be able to boost the price of Ether in a “significant way.”

The merge upgrade is expected to happen less than two weeks from now. As reported by U.Today, Cosmos founder Ethan Buchman recently described the event as a “huge deal” for the industry.     
 

article image
About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.