Ethereum's Merge Could Lower Demand for Bitcoin but Regulatory & Technical Challenges Persist

cryptonews.com:

Ethereum’s (ETH) transition to proof-of-stake (PoS), known as The Merge, will likely lead some current bitcoin (BTC) holders to move part of their capital to ETH, one industry insider argues. Others, meanwhile, say that despite a yield on ETH being attractive, regulatory scrutiny means more uncertainty lies ahead for ethereum investors.

Once The Merge has been completed, “users will be able to stake and there won't be any upfront cost,” Kosala Hemachandra, founder and CEO of the popular ETH wallet MyEtherWallet, stressed as the main benefit for ETH investors in a comment to Cryptonews.com.

Hemachandra said that he believes “a lot of bitcoin holders” will move to ethereum in order to be able to stake their tokens and earn a yield on their investment.

The transition of the Ethereum network to the proof-of-stake consensus mechanism comes at a time when more and more institutional investors are getting involved in the crypto landscape, with most so far getting exposure only to BTC.

However, with increasing pressure from groups claiming that Bitcoin’s proof-of-work (PoW) consensus mechanism uses too much energy and is therefore not environmentally friendly, virtue-signaling financial institutions may be getting more interested in Ethereum.

It’s worth noting that no firm timeline for Ethereum’s transition to PoS is known to the public. The best estimates for when The Merge will happen are therefore based on comments from leading developers on the project, pointing to completion in the second half of 2022 or early 2023.

Estimates for when the highly anticipated Ethereum Merge will happen have been pushed back a number of times in the past, and the event was until recently expected to occur sometime between May and June this year.

Desp