Ether’s (ETH) price jump from mid-July until mid-August may continue to fade as investors seek to better understand the implications of the Merge, Ethereum's tech upgrade that will transform it to a proof-of-stake network, along with future blockchain upgrades, Bank of America said in a note Friday.
In addition, the investment bank expects rival blockchains such as Binance Smart Chain, Tron, Avalanche and Solana to gain market share until Ethereum overcomes its current headwinds.
“Investors likely realized that Ethereum's seemingly imminent transition to proof-of-stake (PoS) will not address scalability concerns or high transaction fees,” BofA analyst Alkesh Shah wrote in a note to clients.
Traders have highlighted that while the Merge was likely driving short-term price appreciation in ether (ETH), Ethereum's native token, the long-term outlook for the asset remained muted considering a weak macroeconomic sentiment and bitcoin technicals pointing to a downside.
On Friday, crypto and equity markets slid after Federal Reserve Chair Jerome Powell’s hawkish remarks at the long-awaited keynote address at the Fed's Jackson Hole, Wyoming, conference. Bitcoin (BTC) fell about 4% to below $21,000, while ETH dropped 8% to around $1,559.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.