The price of ethereum (ETH) has increased in you by about 70%. Here the coin performed much better than most others cryptocurrenciesbut what exactly is the reason for this?
If we are to believe JPMorgan analyst Ken Worthington was the Ethereum Merge the main reason behind this positive price development. He writes that in a recent report. Ethereum is not the only one that rose. Crypto in general had a good month. As mentioned, ETH rose 70%, but also bitcoin (BTC) saw a price increase of 27% in July and solana (SOL) for example went up 38%.
What Worthington also said helped the growth is the fact that the overall Decentralized Finance (DeFi) sector has performed well in the past period. The total value locked (TVL) increased by 22% in the past month. Worthington had this to say, among other things:
“Given that DeFi tends to be built on Ethereum, the improvements from past concerns about DeFi along with the good news about the Ethereum Merge are likely driving ETH’s particularly strong price rally against BTC.”
Ethereum Merge
The Ethereum Merge is getting closer and the anticipation is growing. After a successful test it looks like the merge will take place in September. This will ensure that the Ethereum blockchain of a proof of work (PoW) system will transition to a proof of stake (PoS) consensus model.
The American bank Citigroup already announced that the changes it entails can be very interesting for users and investors. For example, Citigroup talked about the energy consumption of the Ethereum, which will decrease by no less than 99.95%. This is because the switch to the proof-of-work system is basically the end of the Ethereum mining era. This is also the reason behind the significant reduction in energy consumption.
