Banking giant Citi Bank highlights the importance of the leading altcoin Ethereum’s Merge upgrade. The bank’s report notes that the upcoming upgrade will make Ethereum a store of value.
“Upcoming Merge will make leading altcoin project a store of value”
cryptocoin.comAs you follow, the Ethereum (ETH) Merge upgrade is scheduled for late September. Analysts say this raise will have a bullish effect on the price of the asset. Due to factors like these, Merge is among the most anticipated cryptocurrency events. Accordingly, banking giant Citigroup believes that the upgrade could have various implications for Blockchain.
The bank’s research says that once Merge is launched, this will lead to lower energy density. He also notes that it will turn Ethereum into a deflationary asset. In addition, he claims that a possible roadmap could shift to a more scalable future through sharding.
According to Citi, it is possible that the Proof of Stake (PoS) transition could reduce the overall issuance of Ethereum by 4.2% per year. Therefore, the research states that once Ethereum becomes a deflationary asset, the leading altcoin will stand out more as a store of value.
Ethereum will become a deflationary asset
Citi also predicts that as a deflationary asset, Ethereum is unlikely to be the highest-yielding Blockchain. The report notes that with Merge, Ethereum’s block time will drop from 13 to 12 seconds. He also adds that there will be a drop in wages and an increase in speed.
Interestingly, Citi points out that Ethereum as a PoS network will attract cash flows by allowing the use of different valuation methods not currently available for Blockchain. Overall, Citi notes that after Merge, Ethereum can be considered an energy efficient and environmentally friendly crypto, as its energy consumption will drop by 99.95%.
What does Ethereum Merge include?
In the upgrade scheduled for September 19, Blockchain’s existing Ethereum main net will merge with the Beacon Chain PoS system. After Merge, Beacon Chain will work using PoS. In turn, the main net will continue to be secured with Proof of Work (PoW). So the two systems will exist simultaneously.
Notably, since announcing the upgrade, Ethereum’s value has exhibited bullish momentum with the price challenging the market meltdown. As a result, the report states that Merge will act as a catalyst to push Ethereum to become a ‘global enterprise-grade asset’. The market, on the other hand, is waiting for the changes in the network to be reflected in the price.
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