ETH to BTC prediction: Will post-Merge Ethereum rise to challenge Bitcoin domination?

ETH to BTC prediction: Will post-Merge Ethereum rise to challenge Bitcoin domination?

Bitcoin (BTC), the crypto market pioneer, is, by market capitalisation, twice the size of ethereum (ETH), the second largest coin. Will ETH eclipse BTH following successful completion of The Merge that saw it switch to the proof-of-stake (PoS) consensus mechanism?

Here we take a look at the ETH to BTC exchange rate, and what factors are shaping ETH/BTC in 2022 and beyond.

What is ETH/BTC?

ETH/BTC represents the exchange rate between ether, the Ethereum blockchain’s native coin, and bitcoin, the native coin on the Bitcoin Network.

ETH/BTC represents how many bitcoins can be bought for one ether, with the rise in ETH/BTC signifying either a rise in ETH or fall in BTC, and vice-versa.

BTC was meant to be “a purely peer-to-peer version of electronic cash”. However, over the years the cryptocurrency has also become a store of value and a comparison to gold as a hedge against rising inflation.

Bitcoin mining relies on a blockchain that connects all public transactions. Using a proof-of-work (PoW) consensus, BTC miners compete against one another to solve mathematical equations and confirm the legitimacy of transactions. They are rewarded in BTC tokens.

In order to reduce the rate at which new BTCs are given as rewards, the cryptocurrency was designed to undergo halving events roughly every four years. A halving reduces the number of bitcoins released into circulation by half, limiting supply.

Ethereum, a programmable network for building decentralised applications (dApps), was launched in 2015, and was inspired by bitcoin’s limitations.

“While Bitcoin is only a payment network, Ethereum is more like a marketplace of financial services, games, social networks and other apps that respect your privacy and cannot censor you,” Ethereum’s website says.

Another key element of Ethereum is the blockchain’s ability to run smart contracts – computer programmes on the blockchain that allow for the creation and smooth running of dApps.

Just like BTC, ETH initially used a PoW mechanism, but since 15 September 2022 relies on PoS. The change became known as ‘The Merge’, and was designed to reduce Ethereum’s energy consumption by around 99.95%.

The Merge is one of a series of upgrades. In a July presentation, the platform’s co-founder, Vitalik Bouterin, named the following development stages, but did not specify when they will happen:

  • The Surge – the addition of Ethereum sharding, which will lower the cost of bundle transactions and make operating easier.
  • The Verge – users will be able to become validators without having to store large amounts of data.
  • The Purge – will simplify the Ethereum protocol and cut down on the amount of space the blockchain uses.
  • The Splurge – this upgrade includes “all of the other fun stuff”.

These updates also have potential to affect the ETH price  shaping the ETH to BTC exchange rate.

ETH to BTC historical rate chart

The ETH to BTC exchange rate surged by 2,518% in the first two years after the pair started trading, from 0.005767BTC in August 2015 to the all-time high of 0.151BTC in June 2017, signifying the quicker rise in ether’s price.

However, this peak in the ETH to BTC price chart did not last long. The exchange rate fell to 0.02427BTC in December 2017 – down 83.9% since the June peak.ETH to BTC exchange rate, 2015 - 2022

The ETH value reached $1,396.42 in January 2018, and the ETH to BTC rate jumped to 0.09724 BTC.

ETH to USD exchange rate, 2015 - 2022

ETH managed to uphold its positive trend against BTC for the next three weeks as the price chart gained 16% more, peaking at 0.1131BTC on 1 February 2018.

ETH to BTC performed fairly well for the duration of 2021, peaking in mid-May at 0.08178BTC, when the ETH price reached $4,168.7 and BTC was trading at $50,000.

The ETH/BTC pairing was not hugely affected when the BTC value reached its all-time high of $66,971.83 in November 2021, It did peak in December 2021 at 0.0879BTC after briefly falling to 0.06034BTC on 19 October 2021.

BTC to USD exchange rate, 2015 - 2022

Following the collapse of the TerraUSD (UST) stablecoin and its sister token LUNA and the wider crypto crash that followed, the ETH to BTC exchange rate fell by nearly 30% from 0.07554BTC in May 2022 to 0.05373BTC in July, indicating a faster decline of ETH price.

ETH’s price dipped to as low as $993 in June, with BTC slumping to $19,017 amid the bearish sentiment in the cryptocurrency world sparked by LUNA collapse and tightening monetary policy.

Ether rose  to 0.0846BTC in September 2022 in anticipation of The Merge. The current exchange rate stood at 0.07088 BTC, as of 20 September.

Is The Merge driving ETH/BTC?

On 15 September Ethereum successfully upgraded its system from PoW to PoS after a six-year build-up. However, the ETH price did not rally as much as investors were anticipating.

Anndy Lian, chief digital advisor at the Mongolian Productivity Organisation and author of NFT: From Zero to Hero. noted that right after The Merge, the price swung above $1,640 and fell shortly after:

“This is very much expected. There was much influx of ETH into various exchanges since the 12th and then building up to around 1.8 million ETH before the completion. In this case, I see that investors could be planning to sell off before the price fell.”

Lars Seier Christensen, chairman of the Concordium Foundation and founder of Saxo Bank, said that the Ethereum community anticipated a “much more positive reaction to the successful Merge”. He added that the recent rally was what in TradFi we call “buy the rumour, sell the fact” and that whoever saw The Merge as upbeat news had already bought ETH.

“Merge is really a non-event. It changes nothing in terms of scalability or fees, and actually antagonises a number of long-term Ethereum supporters – the miners,” he added.

Eugene Zomchak, CoinLoan’s head of product, told Capital.com that the value of ETH to BTC is likely affected by other microeconomic factors such as the cryptowinter and the Fed’s policy tightening than The Merge, noting:

“There are some positive forecasts coming in from enthusiasts who note that the Merge was a landmark event and the price of ether could surge by two, three and even five times.”

Since The Merge, the BTC price has been fluctuating between $19,000 and $20,000. ETH reached $1,469.74 on 17 September before falling to around $1,300, as of 20 September.

Lian stressed that it is important investors remind themselves that the effects of The Merge, possibly including the ETH to BTC price, will only be felt in the long-term:

“The gas fees will remain the same, and other scalability issues are still unsolved. The community at large must wait for Surge, Verge, Purge, and Splurge improvements to see a reduction in transaction costs and boost scalability significantly.”

Concordium Foundation’s Christensen also noted that the current market environment is challenging:

“The correlation to broader asset markets is very clear, and if stocks don’t recover, this will add to negative sentiment. If Ethereum goes decisively below 1,400, I think we could see a significant sell-off.”

Christensen added that the next Ethereum upgrades will be in focus:

“The most important thing is increased scalability, which will reduce fees. Until that happens, Ethereum is in effect not much use, and entirely reliant on Layer 2 solutions that provide much less security than Ethereum itself.
“Considering how difficult the Merge has been to execute, with years of delay, my personal belief that Ethereum can deliver the next stages in a speedy fashion is limited. Ethereum has one advantage and one advantage only: a very loyal ecosystem that will go through the most extraordinary and irrational hurdles, just to stay loyal. I wonder how long that will last.”

ETH/BTC exchange rate forecasts

Based on its analysis of past price performance as of 20 September, algorithm-based forecasting service Wallet Investor predicted that ETH/USD could trade at $2,391.383 in 2023 and reach $7,135.056 by 2027.

In terms of bitcoin prediction, the site saw BTC/USD trade at $33,668.92 in 2023 and reach $79,969.28 by 2027.

While Wallet Investor did not provide a direct ETH/BTC exchange rate forecast, the data suggests that they expected the rate to be 0.335BTC in 2023 and 0.421BTC in 2027.

DigitalCoinPrice supported a positive ETH/USD forecast, as of 20 September, and expected the coin to grow to $1,832.85 by the end of 2022, $3,032.72 in 2023 and $5,417.40 in 2025. Its long-term prediction saw the token surge past $18,000 in 2030.

The site also gave an upbeat BTC/USD forecast, expecting the coin to grow to $27,580.79 by the end of 2022, $41,874.03 in 2023 and $76,453.11 by 2025, passing $264,000 in 2030.

DigitalCoinPrice expected the rate to be 0.0665BTC by the end of 2022, 0.0724BTC in 2023, 0.708BTC  by 2025 and 0.068BTC by 2030.

Note that forecasts and analysts’ expectations shouldn’t be used as a substitute for your own research. Always conduct your own due diligence and rely on your own projections. And never trade money you cannot afford to lose.

 

Source: https://capital.com/eth-btc-prediction-ethereum-bitcoin-merge-domination

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Will NFT Sales Surge because of Ethereum Merge?

Will NFT Sales Surge because of Ethereum Merge?

Ethereum got its long-awaited upgrade. After years of planning, development, and delays, the world’s second-largest coin by market capitalization has moved to proof-of-stake. The Merge is up and running, yet the price is still down but NFT sales went up after months of downtimes.

Sales volume and prices of NFTs have surged, according to crypto Footprint Analytics, a crypto big data company. Before the merge, Bored Ape’s sales were up by more than 45% from a week before. They have transacted one of the NFTs at 130 ETH, which was around $230,911.25 at the time. After Merge, they made around $7 million in sales. While CryptoPunks had 25% more than its previous week. Doodles, an NFT collection had more than a 1,200% jump in sales after it secured a $54 million funding round led by Reddit founder Alexis Ohanian’s venture capital firm, Seven Seven Six.

Four seconds after the Ethereum Merge, the first transaction of an NFT created using the proof-of-stake (PoS) consensus was approved. Block 15537393’s timestamp for the Merge was 6:42 AM UTC on Thursday. A user promptly purchased an NFT at block 15537394 with 36.8 ether (ETH), or $53,403 at the time.

For now, the increase in demand for NFTs is a bright spot for the industry. The communities who are watching the NFT market closely also pointed out that there is a chance for the 5th month of continuous dive in the overall NFT market. Others who do not know what will the merge bring to the table were hoping that the transaction fees would be lower and will bring in more sales and liquidity.
Anndy Lian, best-selling book author “NFT: From Zero to Hero” commented: “Users will need to wait for the Surge, Verge, Purge, and Splurge improvements to see a reduction in transaction costs and boost scalability significantly. Low transaction costs are crucial because large costs make many NFT use cases unfeasible, particularly in the gaming and metaverse industries. Numerous NFT gaming weapons, avatars, and skins will probably trade for relatively little money, therefore for them to be profitable, transaction times must be quick and costs must be cheap.”

Lian added that the current cycle looks speculative as the spike effects only happened to a few projects and not all. Whether the prices of existing NFTs would come back is still unclear.

Suppose the legitimacy of both the PoS and PoW chains is recognized by major players in the NFT ecosystem. In that case, the split EthereumPoW chain may dilute the value of existing NFT collections owing to increased supply. This would also create a tangled scenario in terms of intellectual property and commercial rights, perhaps leading to huge disputes amongst NFT owners.

Eventually, the market will determine which NFT assets are valued based on liquidity and community acceptability. Investors and traders may want to wait till the dust settles before making any decisions about their Ether and NFT holdings.

 

Source: https://www.benzinga.com/22/09/28917641/will-nft-sales-surge-because-of-ethereum-merge

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Ethereum Merge hits graphic cards, but GPU-based mining is not dead

Ethereum Merge hits graphic cards, but GPU-based mining is not dead

Ethereum’s shift of its consensus algorithm from proof-of-work (PoW) to environment-friendly proof-of-stake (PoS) in an event called ‘The Merge’ earlier this week will result in sizeable graphic card (GPUs) dump and hit manufacturers such as Nvidia and AMD.

As The Merge has obviated the need to secure the blockchain network, GPUs are no longer needed on a mass scale and will go for a significant discount, experts said. However, this may not happen immediately as the GPUs can be deployed for a new Ethereum hard fork and mining other stablecoins.

“With the Merge on the cards for a long while now, I would imagine most miners would have planned ahead with alternative money-making schemes. But, once the flooding stops, it would revert to basically as it is now, unless the increased demand for GPUs drop, caused by more than just mining. Things like the extreme influx of using computers for entertainment and work purposes will continue as usual,” Raj Kapoor, Founder and CEO of India Blockchain Alliance, told Moneycontrol.

According to experts, there will be increased availability of second-hand GPUs that have been mined to bits.

With The Merge, the energy used to maintain the whole Ethereum network will drop by a huge 99.9 percent, which will result in a 0.2 percent decrease in world electricity use. However, not all ETH miners may want to give up their GPU exploits in favour of the more environmentally friendly PoS variant.

What is GPU-based mining?

The majority of crypto mining in the beginning, especially for Bitcoin and Ethereum, was done on basic CPUs for home computers but as demand increased so did the mining difficulty.

People then discovered that their GPUs were well suited to handle algorithms since these computer parts were actually intended to handle equations for 3D and physics rendering, which are identical to the equations in the blockchain algorithms.

Since GPU mining was far more efficient than using other types of mining gear, it signalled a major shift for the community.

While traditional CPUs were like blunt instruments when it came to mining cryptos, in contrast, GPUs were well-honed Samurai swords. They established a new benchmark since they were much more efficient than the previous technology.

EthereumPOW made for GPU miners

Despite Ethereum Classic already existing as a PoW alternative to the main ETH chain, a new hard fork called EthereumPOW (ETHW) was made for GPU miners.

A hard fork is a significant modification to the network protocol that makes previously invalid blocks and transactions valid, or vice versa. Simply put, a hard fork happens when nodes of the most recent version of a blockchain stop accepting older versions, leading to a permanent separation from the earlier network version.

The ETHW chain’s developers want to replicate the whole original ETH blockchain, including all of its currencies, NFTs, Dapps, and liquidity pools. However, the value of ETHW remains uncertain as there would be few Dapp operators and unlike Ethereum Classic, it is not backed by any stablecoin. Also, emulating the original Ethereum chain would be tricky since ETHW now contains the difficulty bomb, which will render GPU mining obsolete around 2023.

Even so, ETHW was able to secure the backing of BitMEX and Poloniex, two reputable crypto exchanges, as well as the inventor of TRON. Although ETHW has not yet been released as a token, its IOU worth is now trading around $9.09. IOU stands for ‘I owe you,’ which denotes that one party owes another one money.

Since the chain has not yet forked, the ETHW coin would derive from a possible Ethereum hard fork.

Mining for other cryptos

After The Merge, GPU miners will be looking elsewhere for opportunities, like mining some other coin which would still reward firms of graphics cards.

Ethereum is not the only coin that is mined decently on a graphics card. Beam and Ravencoin are actually similarly profitable at this time and though ETH mining has stopped, these will continue. While there will be increased competition to mine these coins, it would balance out eventually.

“Additionally, the companies that produce and distribute GPUs are already selling such items in bundles with other products to drive up their sales and profit margins,” Kapoor adds.

The much-anticipated GPU flood that would curb inflated pricing might be delayed since many GPU miners want to continue supporting Ethereum Classic, ETHW, or whatever PoW currency becomes more profitable.

Interestingly, in anticipation of the debut of the next generation, chip makers like Nvidia and AMD are now selling the majority of current-generation GPUs for less than the manufacturer’s suggested retail price (MSRP).

The impact of PoS can be reduced if PoW chains keep demand high

Anndy Lian, Chief Digital Advisor, Mongolian Productivity Organization, says that the ETH upgrade would be one of the big revenue misses by Nvidia and its stock has fallen nearly 20 percent since the previous quarter due to a slowdown in the gaming business and weakness in the global markets.

“The impact from the change to POS would be reduced if the forked PoW chains can keep their demand high, getting support from the big miners and backed by strong communities who believe that PoW is the core value. If this is executed properly with the support of Nvidia, this market push would surely put the listed company in a much better position,” Lian says.

More certainty for chip manufacturing companies

A Barron’s report quoted analysts led by Stephen Glagola at investment bank Cowen saying that The Merge will affect chip manufacturers whose graphics processing units have been employed in the process because Ethereum’s switch to PoS will eliminate the necessity for mining of Ether.

But a decline in mining is not necessarily negative, rather, it will provide companies manufacturing chips more certainty and eliminate the risk of demand that is blindsided by unstable crypto prices.

“For GPU suppliers Nvidia and to a lesser extent AMD, we view the upcoming Merge as a long-term positive for sentiment as it likely removes the risk of another painful crypto bang/bust cycle in the future,” said the Cowen team.

Source: https://www.msn.com/en-in/money/topstories/ethereum-merge-hits-graphic-cards-but-gpu-based-mining-is-not-dead/amp/ar-AA11Z7rn

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j