Crypto investors’ attention turned back to the big selloff in riskier assets, causing ether to hit a seven-week low and bonus tokens awarded to holders of the digital asset to drop by more than 50%. The core wealth of the Ethereum blockchain, ether, fell for the sixth consecutive session, down 6.5% to $1,407. Network transfers from a more energy-efficient way of managing transactions, the merge, attracted investors’ attention for weeks.
“This is likely due to a deteriorating macro backdrop that is causing a fall in the value of all risk assets in general, including traditional equities. Furthermore, it was widely observed among traders that the merge was a news event despite the long-term positive effects of the upgrade,” tweeted Christine Kim, a research associate at Galaxy Digital.
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“The price action of ETH after the merge should not be taken as an indication of the relative success or failure of the upgrade. From a technical point of view the merge was a resounding success.”
As of 2:58 PM in New York, bitcoin was down about 1.5% to $19,548. The largest cryptocurrency by market cap is down nearly 9.8% this week, compared to a 19% drop in Ether.
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The offshoot, known as EthereumPOW, represents a large portion of blockchain’s legacy computing activity, which declined to participate in the software upgrade. Ethereum changed its network security protocol from a so-called proof-of-work system to a proof-of-stake. Since the end of September 15, the additional crypto tokens received by investors after the merger has fallen by 60%.
According to data from CoinMarketCap.com, new cryptocurrencies were listed at prices as high as $33 in the past 24 hours and were listed on exchanges such as FTX before Ether holders received the tokens. At the end of September 16, it was trading at around $9.27.
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“Most non-event and broad macro headwinds are still in play at the end of the merge, with traders opening up their ETH positions and rolling back into bitcoin,” said Jason Lau, San Francisco-based chief operating officer of OKCoin Exchange.
Henry Elder, Head of Decentralized Finance at Wave Financial, said, “Now that the merge has (very successfully) finished, we have run out of near-term positive catalysts and we are walking into a wall of bearish macro sentiment. “
(with agency input)
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