Crypto weekly wrap: Despite gains, experts want investors to wait and see
Cypto investors saw a renewed interest in the crypto markets in the last seven days with the “Merge” approaching. The crypto market capitalization broke $1 trillion after two weeks, Bitcoin rose 3 percent and Ethereum rose over 6 percent. However, experts believe that investors must continue the wait-and-see approach.
“It is advisable to take a long-term approach in the crypto market with a buy on dips strategy only in strong tokens,” Dileep Seinberg, founder and CEO of bill payments and utility crypto platform, MuffinPay said, “There are interest rate hikes and liquidity is being pumped out of markets, which does not bode well for riskier assets.”
The impact of inflation and interest rate increases, Seinberg said, will not affect a particular cryptocurrency, but the market in general. “When we talk about the crypto winter or the interest rate hikes, it will not affect any specific token, it will enchant the market across,” he said.
With Ethereum’s merger, scheduled for September 14, the energy consumption of mining these coins is expected to decrease by 99 percent. It will change Ethereum’s mechanism from the current proof-of-sale (PoS) to proof-of-work (PoW). As miners now shift their focus to other Proof-of-work (PoW)-based coins, the value of other cryptoassets rose.
“Anticipation building for the upcoming ETH merger expected September 12-15 led to a 6 percent increase this week, while other PoW protocols also hit monthly highs in price and hashrate as current Ethereum miners look to use their computing power elsewhere after the merger,” the CoinDCX research team told Business Standard.
“DeFi led sector returns to rise 15 percent this week led by a revival in the Luna ecosystem and due to over-leverage of crypto-security in DeFi protocols in anticipation of the upcoming Ethereum merger,” it added.
Ethereum will be on the radar of investors, but it may not perform as well as expected.
“When Ethereum’s long-awaited merger was announced, there was a sudden surge in prices, which later dissipated,” Seinberg said, “Even after the merger and in the short term, it will be on the radar of the crypto community, which treats it as a get-rich-quick scheme which is not true.”
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