Ethereum Delayed Merge, Price Falls Below $1550 in 24-Hrs

The price of Ethereum (ETH) fell below $1,700 in July 2021, when it reacted to an increase in selling pressures across the crypto market. This time, however, it appears ETH is reacting to macro-economic conditions coupled with a potential delay in its transition to a proof-of-stake (PoS) blockchain.

According to CoinMarketCap, ETH plunged to $1,544, with an 11% loss in the last 24 hours and a 10% loss in the last seven days. Of the top 10 cryptocurrencies, the price of ETH performed worst in the last seven days, followed by Polkadot (DOT), Solana (SOL), Dogecoin (DOGE), and Ripple (XRP).

Three days ago, the merge upgrade of the Ethereum network went live on its oldest testnet, Ropsten. The ETH community celebrated this feat, saying a mainnet launch could be possible by August or September this year. The Merge, however, encountered some challenges. But Tim Beiko, a core developer at ETH, claimed they were addressed and fixed.

The Difficulty Bomb,  a mechanism to progressively increase mining difficulty, is also a part of the mechanisms for the migration to a PoS consensus. The bomb is to encourage miners to abandon proof-of-work (PoW).

ETH core developers agreed that the difficulty bomb pend for two to four months to grant them enough time for the migration to a PoS consensus. Ben Edgington, lead product manager for Teku, an Eth2 client developed by ConsenSys, argued differently. He said:

So we will push back the Ethereum difficulty bomb. We say it won’t delay the Merge. I sincerely hope not. Every extra week on PoW generates close to 1 million tonnes of CO2 emissions.

The Ethereum merge is the much-anticipated transition from its current proof-of-work mechanism to a proof-of-stake consensus algorithm. The PoS mechanism will enable the ETH network to scale and very transaction faster. At the moment, the ETH network can only process 15 to 45 transactions per second.