So, you use less energy, that don’t impress me much
The dust has settled on the Ethereum Merge and the end result for investors was another slice of bear market. Many market participants thought that the coin could see a big rally after the event but that really highlights the naivety of investors.
When the Merge was coming closer, it was rumored that the upgrade would lead to lower gas fees and improved scalability. The Ethereum network clarified ahead of the event that there would be no change- investors stood still.
In my book, The Stock Market is Easy, I lean into investment psychology a lot, and investors need the ability to change their minds and remove emotions from investing. The same behavioral dynamics are present in crypto investing. The reality is that a 99.95% reduction in energy usage from Ethereum is a great step and another on the way to the ultimate goal of reduced gas fees and scalability.
But in the short term, it meant nothing.
Institutional investors are avoiding crypto because of the lack of regulation, constant hacks, the instability of stablecoins, and a continued bubble-bursting bear market. No serious investment fund would ignore those issues and pile into Ethereum because it consumes less energy.
On a more positive noted, Mastercard’s collaboration with Paxos is a step in the right direction. The payments giant will help existing banks to offer crypto to their clients. The company’s chief digital officer said polling shows demand for the asset, but that 60% of respondents said they would rather invest through their existing banks.
“There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions,” Jorn Lambert told CNBC.
But again, there is no immediate change to the crypto landscape because of the recent trajectory of financial markets, and because of those issues mentioned.
