Crypto Market Review, September 16
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- Ethereum follows the “sell the news” rule
- Bitcoin or Ethereum?
Despite the successful Ethereum Merge, most altcoins, even those that benefited from the upgrade, are entering the red zone. Ethereum Classic, which gained more than 200% of its value before the Merger, has shown nothing out of the ordinary in recent days, as the asset value fell by more than 12%.
Cardano also remained anemic with less than 5% average daily volatility and dwindling trading volumes. Despite being one of the alternatives to Ethereum in terms of network use and purpose, investors don’t seem to be interested in Hoskinson’s blockchain, which actually offers numerous benefits to developers and users.
Fortunately, Cardano has a hidden growth factor, which is a possible regulatory restriction on Ethereum, which would cause an outflow of funds from the second largest network in the market towards certain alternatives, one of which is Cardano.
Ethereum follows the “sell the news” rule
With the successful Merge upgrade, the selling pressure in the Ethereum market was almost non-existent as no major issues were encountered during the transition. However, we saw a rapid increase in negative trading within a few hours of the PoW drop.
In just a few hours, Ethereum lost nearly 10% of its value, making Merge a negative event for investors in the short term. In the meantime, it’s safe to say that the reaction of the market’s second largest cryptocurrency has nothing to do with the fundamental update itself.
Over the last few weeks, Ethereum beat most of the cryptocurrency market by more than 50% in terms of price performance, and Merge is probably the main reason for that. Today’s correction was mostly caused by factors unrelated to Ethereum, such as negative sentiment among investors and a general slump in the digital asset market.
Bitcoin or Ethereum?
With the Merge update, Ethereum became maximally separated from Bitcoin, which is why in the next few years we will see a great experiment to determine which network will prove to be more decentralized and sufficient, even though they have two completely different purposes.
Bitcoin cannot be used to build decentralized applications, NFT collections and other solutions that increase its use. Network scalability is also a big problem. Therefore, the most popular and only way to use BTC is for payments. With relatively low fees, users can trade almost any amount abroad and avoid using third parties.
The PoW mechanism is often considered the one and only way to provide real value to digital assets, as they receive a certain cost base and should not drop below it. Unfortunately, this thesis was refuted several times when the price of the first cryptocurrency fell below the 1 BTC mining cost level.