David Canellis

<div id="highlights-block_63231910eded9" class="highlights">
 <ul>
 <li>Crypto markets are weighed heavily by macroeconomic factors, regardless of the Merge’s significance</li>
 <li>Some existing proof-of-work chains are seeing booming hashrates in the hours since Ethereum switched to proof-of-stake</li>
 </ul>
 
</div>



The Merge <a href="https://cms.blockworks.co/ethereum-switches-to-proof-of-stake-after-7-years-of-work/" target="_blank" rel="noreferrer noopener">happened this morning</a> — a milestone Ethereum co-founder Vitalik Buterin has been anticipating for eight years — but the price of ether has remained muted.



In fact, ether dropped up to 2% around the time of the transition. It has since rebounded slightly, trading at $1,590, down 1% over the past 24 hours as of 7:30 am, ET.



Bitcoin, which alongside Dogecoin is now one of just two top-10 blockchains running on proof of work, saw its native cryptocurrency shed a similar amount, hovering around $20,150.



In fact, no top-tier digital asset is green over the past day. Cosmos, a rival layer-1 blockchain, did however see its native asset ATOM catch a 10% wave in the minutes directly following the Merge, jumping from $13.30 to as high as $14.64 this morning.&nbsp;



ATOM is currently the second-best top-50 digital asset over the past week, up 12%, just behind Yuga Labs’ ApeCoin, which has added 16%.



Such anti-climatic price action may have some investors scratching their heads. Still, industry players remain bullish on the Merge’s long-term impact.



“The Merge is far from being priced in. Recent price action has been largely influenced by



external macro factors coupled with broader industry shakeouts,” Daniel Dizon, CEO at Ethereum staking protocol Swell Network CEO, told Blockworks in an email.



Dizon expects the macro environment to normalize over time, while the Ethereum ecosystem will continue to innovate and develop. This, combined with structural changes to how ether is issued, would be enough to bring in more retail and institutional capital, resulting in upward price pressure, Dizon said.



He added that switching to proof-of-stake has “entrenched Ethereum as the de facto blockchain to power Web3 and beyond.” Future upgrades, particularly around scalability, crossed with burgeoning activity across its layer-2 landscape, are expected to make it challenging for alternative layer-1s to legitimately encroach on Ethereum’s market share over the medium-to-longer term.



<h3 class="wp-block-heading">Absent ether mining, other blockchains see hashrate boost</h3>



The Ethereum blockchain is no longer mineable. Its original fork, Ethereum Classic (ETC), has seen its <a href="https://www.coinwarz.com/mining/ethereum-classic/hashrate-chart" target="_blank" rel="noreferrer noopener">hashrate</a> explode out of the Merge, surging nearly 160% in the past day, from 55 TH/s to 142 TH/s.



That makes the network more secure and less susceptible to a 51% attack, somewhat crucial as ETC has <a href="https://www.coindesk.com/markets/2020/08/29/ethereum-classic-hit-by-third-51-attack-in-a-month/" target="_blank" rel="noreferrer noopener">suffered from several</a> in the past.



Ethereum Classic’s hashrate (which measures the total computing power on the network) repeatedly hit all-time highs leading up to the Merge, having doubled between the end of July and the start of September.



For scale, Ethereum <a href="https://www.coinwarz.com/mining/ethereum/hashrate-chart" target="_blank" rel="noreferrer noopener">finished</a> its last full day of proof-of-work mining with more than 1,000 TH/s, while currently Dogecoin boasts 542 TH/s — both dwarfing ETC.



Crypto miners running high-performance GPUs are clearly looking to retain profitability with alternative networks. But that hasn’t suddenly converted to any sizable price movement for Ethereum Classic’s native token, ETC, which is up 5% in the past day but only 2% in the past week — again, just noise.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="479" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png" alt="" class="wp-image-31412" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Screen-Shot-2022-09-15-at-14.25.39-1024x479.png?w=50 50w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Ethereum Classic&#8217;s hashrate had been ramping up leading up to the Merge. Source: <a href="https://www.coinwarz.com/mining/ethereum-classic/hashrate-chart" target="_blank" rel="noreferrer noopener">CoinWarz</a></figcaption></figure>



One explanation could be that hashrate alone doesn’t bring usage. Ethereum Classic currently has few transactions <a href="https://etcblockexplorer.com/mempool" target="_blank" rel="noreferrer noopener">in its mempool</a> waiting to be mined — a grand total of 9 as of press time, compared to 165,000 on Ethereum. ETC has however climbed more than 170% in the past two months, hinting that <a href="https://cms.blockworks.co/crypto-markets-bet-big-on-whats-next-for-ethereum-miners/" target="_blank" rel="noreferrer noopener">speculation of future usage has driven</a> its price action rather than any tangible growth.



While Dogecoin and Litecoin haven’t seen any major immediate hashrate boosts, other proof-of-work chains have seen theirs grow around the Merge. RavenCoin’s is up 80% <a href="https://2miners.com/rvn-network-hashrate" target="_blank" rel="noreferrer noopener">today</a> (10 TH/s to 18 TH/s), while Syscoin’s, a much smaller blockchain, has <a href="https://www.coinwarz.com/mining/syscoin" target="_blank" rel="noreferrer noopener">jumped</a> 50% in the past week (39 EH/s to 58 EH/s).&nbsp;



RavenCoin’s native asset of the same name has surged 75% in the past seven days, hinting that markets anticipated miners would — at least in the short term — flock to the chain.



And so, those miners will no doubt be eyeing Ethereum’s most recent fork, ETHPoW (ETHW), which is expected to formally come online sometime <a href="https://cms.blockworks.co/proof-of-work-ethereum-fork-pow-rally-miners-with-1-hour-countdown/" target="_blank" rel="noreferrer noopener">in the next 24 hours</a>. 



<h3 class="wp-block-heading">Ether fork price volatile after airdrop, as expected</h3>



Major mining pools have pledged to support ETHW, alongside prominent community figures such as early ETC backer <a href="https://cms.blockworks.co/ethereum-fork-may-be-doomed-to-fail-but-chandler-guo-is-all-in-again/" target="_blank" rel="noreferrer noopener">Chandler Guo</a>.



In the meantime, crypto exchanges have begun airdropping ETHW to users who held ether at the time of the Merge.&nbsp;



An FTX market for the token is already live — after briefly dumping up to 15%, from $20 to $17, ETHW has since climbed 75% to reach a local top of $30 before retreating below $24 at press time. Although, that’s less than 2% of the price of ether.



At this point, the future of ETHW seems suspect, outside of heavy-capitalized mining outfits swooping for what could be one last hurrah. It seems unreasonable to expect the chain could compete with Ethereum and its merry band of layer-1 rivals, especially so considering no major stablecoin or DeFi protocol has pledged to operate on the network.



“Alternative layer-1s — such as Solana and Polkadot — still have a fair chance to innovate on consensus mechanisms, validator design, smart contract environment, peer-to-peer layers, and more,” Chen Zhuling, CEO at blockchain infrastructure provider RockX, said. “Many of these layer-1s have also been increasingly cultivating their developer communities and advocates.&#8221;



“The game is still on.”



Updated at 10:03 am, ET to add context about ETC&#8217;s price movements.



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