According to data from CoinGecko, at the time of writing ETH was trading at US$1,535.71, up 49.5 percent from its recent low of US$1,027.42 on July 13.
Merge Hype Primary Driver of ETH Price Growth
On July 14, Ethereum Foundation member Tim Beiko tweeted a soft timeline for the much-anticipated Ethereum Merge, suggesting it could take place on September 19:
Despite Beiko’s caveats that this timeline was tentative and subject to change, the market reacted very enthusiastically to the news, with the price of ETH jumping almost 25 percent in the two days following the tweet.
What is the Merge?
The Merge refers to Ethereum’s transition from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism. This transition will mean the end of mining on the Ethereum network, with miners replaced by validators. Validators will need to stake a minimum of 32 ETH on the network and will then have the chance to be randomly selected to add the next block to the chain, in the process earning ETH.
The primary benefit of switching to PoS is enormously improved energy efficiency. Some estimates put the reduction in energy use at around 99.95 percent. However, the Merge in itself is not expected to result in lower gas fees or increased transaction speeds.
Bullish Indicators for ETH
Beyond the spike in its price, several other indicators also suggest sentiment towards ETH is turning positive. The number of whales – accounts holding between 1000 and 100,000 ETH – has grown by 131 since early May, while the number of accounts holding over 100 ETH hit a 15-month high of 45,081 on July 13:
Additionally, the total value locked in the Ethereum 2.0 deposit contract hit a one-month high of US$17,957,275,144.37 on July 18, just days after the announcement of the Merge timeline:
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