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BT Daily News——Evaluating Ethereum: 1 Week After the Merge


1. Evaluating Ethereum: 1 Week After the Merge

Ethereum's new validator system ushered in a new cast of characters responsible for keeping the chain up and running. With these new characters came new concerns around network centralization.

Shortly following the Merge, Gnosis Chain founder Martin Köppelman drew attention for a tweet observing that 420 of Ethereum’s first 1,000 proof-of-stake blocks were proposed by just two entities: Lido, the community validator collective we’ve talked about before in this newsletter, and Coinbase, the U.S.-based crypto exchange.

Ethereum developers frame proof-of-stake as a more decentralized and secure alternative to mining – making it possible for anyone with 32 ETH to play a role in supporting the network, no fancy equipment required.

The most visible on-chain impact of the Merge has been on the issuance rate of ETH, the network’s native currency.

With Ethereum’s update to proof-of-stake, the network has drastically reduced the amount of new ETH issued with every block. In the long term, due to a burning mechanism introduced with the network upgrade EIP-1559, there’s a possibility that this may make Ethereum deflationary – meaning its token supply could decrease over time.

2. What’s next for Bitcoin and the crypto market now that the Ethereum Merge is over?

The Ethereum network successfully shifted to a proof-of-stake (PoS) model, meaning miners are out of pocket but still possibly in possession of their GPUs and ASICs mining infrastructure. It’s possible that some miners might elect to mine on a different chain instead of selling their gear.

Prices of each altcoin also rallied over the past month, with Ravencoin (RVN) up 169%, Ergo (ERG) added 132%, Flux (ZelCash) gained 156%, and Ethereum Classic (ETC) rallied 135% in the past 90-days.

Interestingly, the hash rate and the price dropped sharply on Sept.15, and at the time of writing, just ZelCash and RVN appear to be rebounding. Over the coming weeks and months, it will be interesting to see which network miners possibly select as their new home and the impact this has on the cryptocurrency’s price.

In this week’s Bitcoin analysis, how not much has really changed with Bitcoin’s price. Its price has remained range-bound in the $17,600–$24,400 range for the past three months, and all rallies out of each range-high since March 29 have been capped by the 200-day moving average and an overhead resistance trendline that extends from Bitcoin’s November 2021 all-time high at $69,400.

3. Nasdaq-Listed Bitcoin Miner Terawulf Reveals Firm’s Lake Mariner Site Has 12,000 Miners Deployed

The bitcoin mining firm Terawulf has detailed its recent miner deployments are on track to bolstering the company’s year-end targets. Terawulf made headlines last year, when it was reported that the American actress and businesswoman Gwyneth Paltrow invested in the company. On September 9, Paul Prager, the CEO of the bitcoin mining firm, announced that the company’s New York-based facility located in Lake Mariner was operational and it was managing 1 EH/s of hashpower with 30 MW of capacity.

Terawulf’s announcement on September 19 says the publicly listed mining operation now has “a total of over 1.3 EH/s operational at Lake Mariner.” The added hashrate is thanks to the close to 12,000 bitcoin miners that have been deployed at the New York site. Terawulf’s announcement details that roughly 3,000 Antminer S19 XP units stemmed from an agreement previously made with the mining rig manufacturer Bitmain Technologies.

According to Terawulf, Lake Mariner has two buildings and the initial batch of Antminer S19 XPs have been installed in building one, which has 50 MW of capacity. Building two is expected to add an additional 50 MW of capacity by the last quarter of 2022. Nazar Khan, co-founder and COO of Terawulf, explained that the company was called upon a number of times for demand response efforts.

4. Shark Tank’s Kevin O’Leary Says One Factor Will Determine Bitcoin and Crypto Market Direction

Shark Tank celebrity investor Kevin O’Leary reportedly says that policies will impact investments in the digital asset space as he shares his optimism that US policymakers will be supportive of crypto.

Benzinga reports that O’Leary anticipates upcoming policies to have a positive stance for stablecoins because this will be bullish for both the US dollar and the crypto market.

As the price of Bitcoin (BTC) slides below $20,000, O’Leary also warns that the flagship cryptocurrency will likely remain under pressure unless clear crypto policies are put into place. BTC is currently trading for $18,448, down by more than 70% from its all-time high in November.

O’Leary believes though that the US will roll out its own crypto regulation soon and this will benefit companies such as Bitcoin miner Bitzero, which he has invested in.

5. Maple Finance and Icebreaker Launch Lending Pool for Bitcoin Miners

According to an announcement on Tuesday (September 20, 2022), the new fund targets “public and private blue-chip bitcoin mining and digital asset infrastructure companies” based in North America and Australia.

The pool offers underlying loans with a tenor of 12-18 months, along with an interest rate between 15-20%. Australian financial services firm Icebreaker Finance will manage and administer the loans via Maple’s platform. Funding will be administered to borrowers based on the balance sheet strength, operational efficiency, and financial performance.

The news is coming amid a turbulent period for bitcoin miners in the area of securing financing for their operations. The crypto bear market has seen mining firms struggle to secure loans and pay back creditors.

Back in June, bitcoin miners were struggling to repay loans worth about $4 billion, which were backed by their equipment. As previously reported by CryptoPotato, Bitcoin miner Core Scientific sold over 7,000 BTC in June alone, for an average price of $23,000 per coin, leaving the company with 1,959 BTC in its coffers.

The company later entered an agreement with the investment firm B. Riley, which will see the latter purchase $100 million in common stock of Core Scientific over two years.
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