The Merge will fuel institutional demand for ETH
Switching to Proof of Stake will bring this cryptocurrency into the mainstream
Co-founder and managing partner of the Nexo cryptocurrency lender, Antony Trenchev, says that following Ethereum's transition to the proof-of-stake consensus mechanism, large financial institutions are now more likely to invest in ETH.
ETH will receive institutional capital
Trenchev said in an interview with Bloomberg that Ethereum's shift to a less energy-intensive transaction verification mechanism makes it acceptable after many years to institutional investors who are required to conform to environmental, social and governance (ESG) sustainable investment guidelines.
- Thanks to The Merge, which consequently enabled the transition to higher energy efficiency, the right time has come for greater ETH availability for large institutions that previously could not use the Ethereum blockchain due to a number of regulations regarding the obligation to invest only in ESG-compliant protocols and companies - Nexo co-founder pointed out.
Moreover, he recognizes that the reduction in supply of Ethereum following The Merge will determine a steady rise in the value of ETH over time.
- It can be argued that a large part of the hype related to the historical update of the Ethereum network will not significantly affect the increase in ETH price quotations. Cryptocurrency market analysts predict that there may be a slight decrease in the value of the token. Nevertheless, I think that in the end, the price of Ethereum will go up. This will happen when people understand that we are now shifting away from the fundamentally inflationary asset type, where circular supply has increased by 4.5% each year. This number will now be halved, making it as close as possible to deflationary assets. Unlike the Fed and what they did, he pointed out.
After all, Trenchev believes that Ethereum is unlikely to become bigger than Bitcoin (BTC) in terms of overall market capitalization.
- The Merge is by far the most significant thing that has happened in the entire history of the Ethereum project. On your question about flipping, whether Ethereum will become bigger than Bitcoin, I have doubts... - he admitted.
