There are two interesting things I want to watch from this. The first is I'm interested to see what kind of bull run ETH goes on. The merge has been incredibly long coming, it has huge risks and I think that puts downward pressure on price, you really don't want to be doing stuff in ETH at the moment because there's a fairly good chance something goes wrong, someone stealds $XBn and runs off and the Ethereum guys go "Well I guess we're going to have a centralized intervention and reset the chain back to date Y" (this famously happened with the first DAO). So as that risk dissipates I would expect a decent price run. I'll be very interested if that doesn't happen since it says a lot about broader market conditions.
The second thing I'm interested in is that ETH was the vast majority of revenue for GPU miners. I read an article on HN a few months ago about how once ETH is gone the rest of the PoS chains put together won't yield enough revenue to be profitable for the vast vast majority of current ETH miners. This alone could have a massive ripple effect on the used GPU market. Interesting to see where that goes.
GPUs are already flooding the market. 3090s are up for ~900 bucks on ebay at the moment which is 25% below their MSRP, and I strongly suspect it's miners dumping their stock.
regarding price, one can argue it both ways. at the point of the merge, most assets on ethereum are risky: if you were a uniswap LP and the two assets you were pooling chose different forks as their “official” one (most meaningful for off-chain collateralized assets like USDC), you can bet arbitrageurs would have left you holding the worthless asset on both chains. accordingly, Eth became the “safest” asset during the fork, since both forks will recognize it. that would create buy pressure leasing up to the fork, which goes away after the fork.
but there’s a million arguments on both sides of that picture. i think the strongest argument for price direction is that PoS miners are less likely to sell their Eth immediately after mining it than PoW miners because the latter purchased mining equipment with USD and want to repay that, whereas the former are invested in Ethereum itself instead of their mining equipment. also it sounds like block rewards are decreased with PoS, so the currency itself is deflationary now (?)
this, this is the right response. this is the most telegraphed event in crypto, all the bulls are literally in eth for this, there is just as much likely to be a "sell the news" effect as there is a bull run. OP betrays his bias imagining only one outcome.
The idea that because it's risky right now and that a decrease in risk will provide higher returns isn't necessarily sound. For example, playing a financial equivalent to Russian roulette won't give you higher returns. You can look at the countries titled with the euphemistic "developing markets" which have historically had extremely high risks AND a much lower return than in lower risk countries. The risk-return trade-off may be assumed often, but there are controversies, and it's underlying theoretical basis only holds in an efficient capital markets where market participants are capable of pricing risk. A bank can price the risk of a mortgage default, but how can you price the risk of anything in the Blockchain space, like say Ethereum getting completely wiped out by a hack, etc?
> You can look at the countries titled with the euphemistic "developing markets" which have historically had extremely high risks AND a much lower return than in lower risk countries.
Hmm? Not sure what you mean. High-risk countries' bonds pay higher interest than low-risk countries' bonds. E.g. Ukraine was paying 10% interest in USD when US was paying 1%. Of course, expected value might be lower if you average over all such countries, but we are talking about a "happy case" here where a bad event did not happen.
> how can you price the risk of anything in the Blockchain space, like say Ethereum getting completely wiped out by a hack, etc?
Well, you can't calculate the risk but you can get 1000000% return (the actual return over 7 years for ETH presale). Or you can calculate the risk and get 5% return. It's your choice.
> Well, you can't calculate the risk but you can get 1000000% return (the actual return over 7 years for ETH presale). Or you can calculate the risk and get 5% return. It's your choice.
"Past returns are not indicative of future performance" is a mantra you will see everywhere in the financial world. If not doing any risk calculation whatsoever gives you 1000000% return them you didn't "invest" anything, you just gambled with it.
>So as that risk dissipates I would expect a decent price run.
The risk you're describing is a social-political one. As long as the users do not fork with the etherium developers, that will not happen. Change to PoS has nothing to do with it.
> The risk you're describing is a social-political one. As long as the users do not fork with the etherium developers, that will not happen. Change to PoS has nothing to do with it.
Are you saying that the market did not price in any technical risk? I don’t follow crypto markets closely (and don’t own any), but given the number of crypto bug exploits and the unprecedented nature of this merge, that seems unlikely to me.
Even a social-political risk averted is a risk averted.
The second thing I'm interested in is that ETH was the vast majority of revenue for GPU miners. I read an article on HN a few months ago about how once ETH is gone the rest of the PoS chains put together won't yield enough revenue to be profitable for the vast vast majority of current ETH miners. This alone could have a massive ripple effect on the used GPU market. Interesting to see where that goes.