In particular, Meltem Demirors, the chief strategy officer of crypto asset management company CoinShares, suggested that the macro environment like high inflation might deter new capital from entering into Ethereum while also calling it a ‘buy the rumor sell the news’ event in an interview with CNBC’s Squawk Box on August 22. She added:
Macro elements impact on the Merge
Overall, the announcement about the Merge contributed to the short-term market rally of the crypto market in July. If successful, the September 15 event will make Ethereum a deflationary asset and potentially drive the crypto’s price up. However, the strategist questioned the Merge’s ability to influence the general market as it is viewed as an isolated event. Demirors noted that investors are avoiding risks due to uncertainty surrounding the post-Merge environment, hence capital in the sector has been through options and not direct exposure.
The need to abandon PoW
After the Merge, Ethereum will abandon the Proof-of-Work (PoW) protocol that has come under scrutiny for excessive energy consumption. Notably, several jurisdictions like New York have enacted new laws curbing the PoW. In this line, Demirors considers the attack on PoW as a plot by governments to enact a blanket ban on Bitcoin (BTC). She suggested that attacking mining is a means of tackling the threat posed by Bitcoin. Despite the recent rally, Demirors had previously suggested that cryptocurrencies have ‘no near-term upside catalysts’ while noting that Bitcoin is yet to fall into a recession. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
