In a note to clients on Monday, August 8, JPMorgan analyst Kenneth Worthington, mainly attributed the changing fortunes of the crypto sector to the upcoming Ethereum (ETH) Merge upgrade that will transition the blockchain from Proof-of-Work (PoW) to Proof-of-Stake (PoS), Business Insider reported on August 9.
“It appears that the crypto markets have found a floor despite trading volumes still being depressed <…> What has helped, we think, has been more limited new contagion from the collapse of Terra/Luna.”
The bank added:
“However, we think the real driver has been the Ethereum merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the Merge is viable in 2022.”
Impact of Bitcoin and Ethereum price on crypto market
Furthermore, the bank noted that Bitcoin (BTC) and Ethereum’s ability to gain 36% and 102% since the June lows is another indicator the market has hit a bottom. Overall, Bitcoin has plunged by over 60% from its all-time high of almost $68,000 in November 2021.
Since announcing the Merge upgraded slated date for September 19, Ethereum has been on a bullish momentum leading the market in gains after a disastrous first half of 2022. Consequently, the lender noted that if the Merge is successful, it will help the general sentiment in the crypto markets.
Ethereum’s bullish momentum
As reported by Finbold, on August 8, Ethereum’s bullish momentum saw the asset hit a market capitalization of $219 billion, with the price hitting $1,801.
Amid projections that the Merge will be beneficial for the Ethereum ecosystem and the general market, there is still opposition from some community members towards the upgrade. Interestingly, a section is fronting to unveil an Ethereum hard fork that will retain ETH’s existing PoW mechanism.
However, Ethereum co-founder Vitalik Buterin has downplayed any significant impact of a hard fork on ETH.
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