Ethereum, the second largest cryptocurrency in the world, continued to decline in price over the weekend following the much-publicized network technical change known as “The Merge” last Thursday, in addition to comments from the head of the Securities and Exchange Commission according to which that Ether may have to be considered a security. Ethereum is currently trading at around $1,290, down more than 11% from 24 hours ago, while bitcoin, the world’s most popular cryptocurrency, is also down 8% to just $18,420.
Last Thursday, Ethereum completed a network upgrade called “The Merge,” moving the cryptocurrency from a proof-of-work system to a proof-of-stake system. Proof of work is very energy intensive and requires so-called “miners” who make their computers play a guessing game to confirm transactions. Proof of Stake allows people who already own Ether to “bet” their cryptocurrency to confirm transactions in exchange for long-term interest, similar to savings account returns.
And there is a problem. The move to a “proof of stake” system means that those who invest in Ether and then “stake” their Ether see their investment as closer to security than currency. Especially since very few people use Ether to pay for things. And the staking caught the attention of people like SEC Chairman Gary Gensler. He made remarks that worried cryptocurrency investors after the merger.
Cardano and Solana are already two popular tokens that run on Proof of Stake. Cardano is down 80% from a year ago, while Solana is down 78% from a year ago. Bitcoin is currently trading around $18,420, down 8% in the last 24 hours and well below the all-time high of $68,000 set on November 9, 2021. Fall/Winter 2021 is also when you start seeing all those celebrity TV ads. such as Matt Damon, Larry David and LeBron James. It’s interesting how the smart money tells you to buy at the top when they exit their positions. To name just one example, the Ethereum Foundation sold a large amount of ETH at its peak in November. Either they got very lucky or it was all a Ponzi scheme.
Bitcoin Price, Monday A.M.
Ethereum Price, Monday A.M.
