The Ethereum Merge is expected to happen in a few hours, and experts believe the focus on energy efficiency will have a huge impact on crypto acceptance and investment. However, some experts are beginning to label this event as a supply shock.
According to Raoul Pal, CEO of Real Vision, the switch from proof-of-work to proof-of-stake for Ethereum (ETH) will provide the leading smart contract platform with something “magical.”
The macro expert claims that investors will swarm to Ethereum after it transitions because yield will be added to the protocol in a recent interview on Real Vision Crypto.
Pal expresses that this is extremely noteworthy for the cryptocurrency sector considering ETH is expected to undergo a supply shock additionally because mining would become useless in a proof-of-stake consensus mechanism.
Pal- Decoding the Magical factors
- Several events occur after the merge. Six billion miners, or roughly half of the market, are simply not available for sale every day.
- Then there is the decline in supply, which is really brought on by heightened network activity. A large expansion of the network is required for something to really take hold. Although there is less inflation, it begins to deflate. Ether, which likewise possesses this magical power, is less common.
- The secret magic he said is that you safely incorporated yield into the ecosystem, which will draw additional participants who are looking to exchange yield for ETH.
The Merge- a Boon or Bane for Digital Assets?
Pal predicts that the industry for digital assets will do well in the coming year due to a mix of increasing demand and decreasing supply.
“You have a demand shock, as well as the lack of ESG [environmental, social, and governance] restraints that people believe Bitcoin to have—falsely, but I recognize that that is the mandate that people have.”
Those who wanted to invest but were prevented from doing so because of ESG and Bitcoin are eagerly anticipating [the ETH merging] to take place so that ETH now has yielded. With a yield, a limited supply, and a moving economy, this technological asset you possess represents a promising and exciting future.
That suggests that the upcoming year will likely be very advantageous for digital assets.
Was this writing helpful?