According to a Bloomberg piece titled “Booms, Busts, and Bitcoin,” The Merge will be accompanied by a sequence of events that will alter the view of ETH as an investment asset, with the potential to become an institutional-grade asset on a global scale. In this respect, they note that the alteration of the consensus method will be the determining factor.
Ethereum has exceeded Bitcoin in a number of key adoption indicators that are significantly connected with price, number of active users, wallet addresses containing money, and transaction volume, in some instances even outperforming Bitcoin.
Regarding ETH-balanced addresses, the data indicates that they are presently at record levels, twice what was seen on the Bitcoin network.
Despite the recent price decline, this indicator for network transactions has remained stable so far in 2018, with just a 7 percent decline in transfer volume.
In the last three years, this indicator has increased by 113 percent in terms of active addresses. In the case of Bitcoin, the decline was thirty percent.
In July, the amount of ETH trading approached parity with Bitcoin for the first time this year. According to the statistics company Kaiko, this is owing to the high quantities witnessed in the major marketplaces (Spot and derivatives).
While for many Bitcoin is the dominant cryptocurrency in the ecosystem, a growing number of individuals anticipate a substantial increase for Ethereum after The Merge appears on the network in September of next year.
Possibly the most succinct explanation was provided by investor Raoul Pal, who breaks this position down into three components:
By shifting the consensus method from Proof-of-Work to Proof-of-Stake, the Ethereum community will no longer have Proof-of-Work miners, who will no longer be required to sell their ETH earnings to cover the network’s operational expenses.
This transition to Proof-of-Stake will also increase interest in staking on the network, which will remove a significant amount of ETH from circulation.
As the gap between supply and demand narrows, liquidity will dwindle, leading to a natural price rise. It emphasizes that there will be insufficient ETH to support DeFi/CeFi initiatives.
According to Pal and a large number of other experts, these and other factors may make ETH an increasingly popular financial asset that may potentially beat Bitcoin on big markets. However, it remains to be seen how the market will develop after the Ethereum network begins running under these new circumstances and the upgrade arrives.