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Crypto Volatility Seems to Lead to Purge of “Merger Frontrunners”

Ether outperforms Bitcoin for a third straight day as intermittent bouts of optimism regarding the ongoing Ethereum blockchain update are expected to finally take root.

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(Bloomberg) – Ether outperforms Bitcoin for a third straight day as intermittent bouts of optimism about the pending Ethereum blockchain upgrade are expected to finally take hold.

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The most commercially important native blockchain currency gained up to 2% to hit $1,716 at 10:51 a.m. in New York. Bitcoin was little changed at around $21,693. Other tokens such as Solana and Cardano were trading on either side of unchanged.

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Speculators have been picking up Ether call options with traders betting the token’s price could hit around $2,200 in September over the past few weeks, while showing more interest in put options for protection against the drops after the upgrade. Known as Merge, the Ethereum blockchain network is set to transition from proof-of-work consensus mechanism to proof-of-stake next month after a series of delays.

“We believe the crypto-specific sell-offs are largely over, and so the price action will likely continue to cut hard with the macro for now.” Cumberland, the crypto offshoot of Chicago-based trading giant DRW, said in a Twitter thread on Thursday. “The upside of this volatility is that it likely rattled the ‘merger favourites’.”

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Investors expect the software upgrade could boost the price of the token as the new mechanism replaces a process in which crypto miners use power-hungry computers to secure the network and earn tens of millions of dollars in tokens. in reward. This reduces its carbon footprint by 99%. The new mechanism also helps slow down the rate of issuance of new tokens by eliminating miners.

“The merger (if completed successfully) is now a real catalyst: the impact of removing approximately $20 million a day of miner sales is impossible to ignore.” the trading company said. “It will take significant macro headwinds to offset the impact of the sudden disappearance of this flow,” Cumberland officials wrote.