Just like the stock market, cryptocurrency isn’t faring too well in 2022. Most charts you open these days are going to be in the red for the year, and the economic crisis is probably influencing almost every asset in your portfolio right now.
Ethereum (ETH) is the world’s second-largest cryptocurrency, and looking at its YTD (year-to-date) chart, it’s not looking like a particularly promising investment choice this year now having lost more than 60% of its value so far.
In September, Ethereum’s network got a long-awaited upgrade known as ‘the merge.’ The network shifted from a proof-of-work (PoW) consensus method to a proof-of-stake (PoS) onebasically that means there is now token staking and validators instead of miners.
More importantly, however, the merge also massively reduced the energy consumption of the Ethereum network. Environmental concern is one of the major reasons for criticism of the crypto space, and many investors consider its high energy usage to be synonymous with environmental pollution.
By solving this problem, Ethereum is looking to become more attractive to investors who hold its energy use as a core reason not to invest or promote wider adoption. We shouldn’t underestimate the difference this might make to private investors who adhere to ESG principles.
Ethereum certainly isn’t the first crypto with PoS technology by any measure, but it’s now the largest crypto to implement the technology, which could mean big things.
Staking is another pretty significant development for the network, allowing users to generate a passive income from their ETH holdings. But before we get ahead of ourselves, let’s take a look at the chart Ethereum’s price has dropped by about 18%.the merge was executed on September 15, 2022, and since then,
But wasn’t the merge supposed to send Ethereum to the moon? In fairness to the blockchain, the wider crypto market is faring equally as poorly in the last few weeks and it’s possible that the volatility could remain for the next few months at the least.
However, it seems safe enough to say that the merge will most likely have a positive effect in the long runperhaps over the next two years or so and Ethereum is still definitely a cryptocurrency with potential. That being said, always remember to carry out your own analysis and do your own research before buying or selling anything.
This article was originally published on dailyhodl.com