The long-awaited Merge of Ethereum is finally here, but institutional investors still seem to prefer Bitcoin. Big money doesn’t seem convinced by Ethereum’s new consensus mechanism yet and wants to wait until the project proves itself for a longer period of time. In particular, the uncertain legal status of Ethereum seems to be a reason for institutional investors to stay on the sidelines for a while.
Proof-of-Stake coins may qualify as a security
Last Thursday, Securities and Exchange Commission Chairman Gary Gensler came out of nowhere to announce that Proof-of-Stake coins may qualify as a security. The chairman of the powerful financial supervisory body of the United States did not mention specific currencies, but it seems clear that he is referring to Ethereum. Of course, other Proof-of-Stake projects such as Cardano and Solana may be in the firing line of the supervisory body.
If all Proof-of-Stake projects actually qualify as a security, there is a chance that they will lose their listing on the major stock exchanges. This means that you will soon no longer be able to buy Ethereum from parties such as Coinbase, Kraken and Binance. A development that may give the price of Ethereum a hard knock. To list securities on a stock exchange platform, certain licenses are required that these parties do not have. This uncertainty seems to be an important reason for the big money to wait.
Ethereum vs Bitcoin
At the time of the Merge on September 15, Ethereum was trading for roughly 0.0817 Bitcoin on Binance. Less than fifteen hours later, that price had fallen to 0.0746 Bitcoin and that price fall does not seem to end yet. At the time of writing, the Ethereum price, measured in Bitcoin, has fallen to 0.0704. It is not clear where it will end, but it is certain that the crypto winter will hit altcoins even harder than Bitcoin. Although we cannot say that Bitcoin is all running smoothly.
Bitcoin has lost nearly 8 percent of its price value in the past 24 hours and is currently trading at $18,500. That puts it not far from the preliminary $17,600 bottom of this bear market. The scary thing is that the Federal Reserve will announce another rate hike on Wednesday, September 21, which could push the price further down. Especially if it turns out that the Federal Reserve raises interest rates by 1 percent. So another exciting week is coming up for the market.