Why is ETH going downhill after the Merge: Ethereum co-founder Joe Lubin revealed a secret

The Merge, the monumental event that all crypto-enthusiasts have been waiting for, happened more than a month ago. The Ethereum network switched from the Proof-of-Work (PoW) to the new Proof-of-Stake (PoS) consensus algorithm. When the X-Date became known, investors rushed to buy ETH, hoping to get a return. Needless to say, everyone was sure that after the Merger, the price of Ether would skyrocket. But… 

What’s going on with Ethereum’s price?

What everyone was waiting for didn’t happen. The price of the second cryptocurrency did not soar. Instead, it stays at the level of $1,200-1,300. And this is despite the numerous advantages that the network has even compared to its main competitor — digital gold — Bitcoin. 

“Bitcoin is the greatest invention since the internet. However, it is no longer the best money or the best Store of Value (SoV). BTC has been superseded, technologically and economically. ETH is more scarce and secure through PoS. Utilitarian value accrual builds the best foundation for SoV,” tweeted founder & chief investment officer at Cyber Capital Justin Bons. 

Analyst Zack Bakos expects the price to fall further.  

“Even [though] the Merge went as well as it could have, in the face of macro headwinds, its narrative quickly died down. In the short term, I still expect weakness in price – potentially back to 3-digit ETH,” he wrote on Twitter. 

Ethereum “shark and whale” addresses (containing between $100 million and $1 million worth of ETH) have dropped by $3.3 million in the last five weeks alone. This corresponds to about $4.2 billion in dropped coins. 

What’s wrong with ETH?

If Ethereum has done so well and even outperformed Bitcoin in many ways, then what’s wrong with the price? The answer to that question was given by Ethereum’s co-founder Joe Lubin in an exclusive video interview with Decrypt. 

“The economy is broken, and it’s likely to remain broken for a while. So we remain the tail that is being wagged by a very sick dog: the global macro situation. But our ecosystem and our company are doing quite well, even with reduced volumes, and reduced intensity. I think we’re all enjoying just building,” he said. 

A year-long fall

Solana founder Anatoly Yakovenko blames the sad events on the bear market. And he believes that this state of affairs will last at least another year. 

“Looking at macro stuff, my guess is there’s probably 12 to 18 months more of this brutal, Fed rates going up. But there is an end to it. And just like the last bear market, a lot of teams that built and focused on product-market fit, and tried to build amazing products — a lot of those succeeded, I think, in a very dramatic way,” he told during a podcast.