Ethereum broke $2,000 early Saturday as anticipation surrounding its crucial Proof-of-Stake update builds.
ETH breaks $2,000 on merge rally
ETH extended its weeks-long rally into the weekend, breaking $2,000 for the first time since May. According to CoinGecko data, the number two cryptocurrency is trading just above the key psychological milestone at press time. It’s gained roughly 16% in market value over the past week.
After the latest surge, ETH is up over 100% from its June low when the broader crypto market plummeted in the fallout from the collapse of Three Arrows Capital.
While several cryptocurrencies have benefited from the market’s bounce, ETH has outperformed many assets thanks to growing anticipation for its landmark “Merge” event. Ethereum is expected to complete its long-delayed upgrade to Proof-of-Stake in the coming weeks in what’s been described as one of the biggest crypto events in crypto history.
“The Merge” describes a process that will see Ethereum’s Proof-of-Work execution layer “merge” with its Proof-of-Stake consensus layer. At that point, the network will rely on validators staking ETH to verify transactions rather than miners. “The Merge” has received widespread support from the Ethereum community due to the changes it will bring, such as a 90% reduction in ETH issuance (because the network will no longer need to pay miners) and a 99.9% cut in energy consumption.
In recent weeks, the so-called “Merge trade” has become a popular move among traders looking to cash in on the excitement surrounding the update. Alongside ETH, many other Ethereum-related tokens such as Lido and RocketPool have rallied. Ethereum Classic has also fared well since it runs Proof-of-Work, and so it could become a hub for miners once they leave Ethereum itself. Some Proof-of-Work advocates are even planning to fork Ethereum to preserve a new ecosystem for miners, and the plan has received support from the likes of Justin Sun.
ETH extended its Merge rally this week after Ethereum completed its final test run for the update on the Goerli testnet. Ethereum Foundation developers then tentatively agreed for the upgrade to ship when the network hits a Total Terminal Difficulty of 58750000000000000000000, after which blocks will be mined using Proof-of-Stake. That’s currently expected to land sometime between September 15 and 16.