Cryptocurrencies traded in narrow ranges on Thursday as the clock ticked down to a major software update for Ethereum, the most commercially important blockchain in the digital asset sector.

Bitcoin rose to around $20,005, while ether, the parent token of Ethereum, also gained slightly to trade around $1,605 as of 11:21 a.m. in Tokyo. The MVIS CryptoCompare Digital Assets 100 Index is down about 6% this week.

According to the network’s developers, Ethereum’s overhaul — known as Merge — will make it much more energy efficient and pave the way for scalability and speed over time. Years of development of the updates are said to go smoothly, although some investors fear potential disruptions.

“The market is pricing in a virtually successful merger,” Teong Hng, co-founder of digital asset platform Satori Research, told Bloomberg TV. “For institutional investors, those who are ESG conscious, they will use this as an opportunity to dip their toes into blockchain, into tokens, into Ethereum.”

Exchanges and lending platforms have begun temporarily shutting down Ethereum-related services ahead of the merger, which is expected to be completed in the next few hours. If all goes according to plan, they will be back online after the renovations are complete.

Ether has rallied roughly 80% since its mid-June lows, well ahead of Bitcoin, partly due to the Merge hype. That rally is cooling off, and another market risk is that investors will take profits, assuming the narrative has played out for now.

But ether’s mid- to long-term outlook is brighter, according to Stefan Rust, CEO of blockchain development company Laguna Labs.

In a note, he said that Ether could surpass $3,000 by the end of this year and may eventually reach a so-called “turnover,” referring to the idea that its market value could surpass that of Bitcoin.

Both Bitcoin and Ether are down more than 50% in 2022 due to rising interest rates draining liquidity from global markets.

© 2022 Bloomberg

Source by [author_name]

Previous articleBanking shows slow recovery in SA
Next articleHow air pollution is changing the way we look at cancer – Podcast | Science