The tentative date for The Merge announced by Ethereum developer Superphiz is less than two months away, and the announcement appears to have sparked a number of developments. First, the network’s native token Ether saw a significant increase in value and second, Ethereum’s hashrate is down 18.21% since June 30. The data also shows that the number of Ethereums stored on exchanges has seen a massive drop, as there were around 25.13 million Ether held on exchanges as of July 5, and today there are only 22.77 million in value of nearly $35 billion.
Data shows significant amounts of Ethereum have been withdrawn from centralized exchanges
On July 9th, 2022, Bitcoin.com News reported on the delayed difficulty bomb and the fact that The Merge would be delayed until at least September. The merger is essentially the upgrade that will finally transition the Ethereum (ETH) network from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
There are now two chains, one still using PoW, and the Beacon chain, which was developed for PoS. On the same day, it was reported that 13,012,469 ETH was deposited into the ETH 2.0 contract. Since then, 136,416 Ethers have been deposited into the contract and there are 410,903 validators.
On July 14, the software developer and community director of the Ethereum Beacon chain, Superphiz, revealed the possible date for The Merge and the schedule noted that it could happen the week of September 19. However, the developer emphasized that the date is not final and that the community should pay attention to official announcements.
Since then, ETH has managed to gain 36.8% against the US dollar in a 30-day period as The Merge boosted the price of the smart contract platform token. Amid the price jump, Ethereum’s hashrate also fell, slipping below the 1 petahash per second (PH/s) or 1,000 terahash per second (TH/s) region. Computing power has since improved as the Ethereum network hash rate trundles along at 1,000 TH/s.
Seven-day statistics further show that 2.36 million ethers have been removed from cryptocurrency exchanges since July 5, according to data from cryptoquant.com. Ethereum is following the same trend as Bitcoin (BTC) as both crypto assets have recently been withdrawn from centralized exchanges in large numbers.
Bitcoin.com News reported on July 10 how the number of BTC held on exchanges fell 9.109% below stats recorded on May 22. Recent data shows that Ethereum buyers and holders are also withdrawing large amounts of Ether from exchanges. Data from Chainalysis shows that the “change in [ethereum] held on the exchanges on the last day is 1.82 million [ethereum]the highest level in over 365 days.”
Merger or fear of bankruptcy?
While recent withdrawals can be attributed to The Merge, crypto investors have withdrawn large amounts of funds from exchanges due to crypto companies facing major financial problems. In the past few weeks, three major crypto firms have filed for bankruptcy and about five or more crypto asset platforms have halted payouts.
—TF (@TF_826) July 15, 2022
For example, people holding crypto assets on platforms like Celsius and Voyager Digital saw their accounts frozen. Fear of losing funds to an insolvent crypto platform has likely unleashed a wave of withdrawals like no other. In the first week of July, Blockfi CEO Zac Prince told the public that while the company was not exposed to Celsius, Celsius’ freeze of operations caused a significant “surge in customer withdrawals” on the Blockfi platform.
While the bankruptcies have caused significant losses across the digital currency economy, so have crypto veterans abused newcomers because they do not keep their assets without custody. The bankruptcies and bankruptcies have also started a boom in people tell others the saying “Not your keys, not your coins”.
What do you think of the large number of Ethereum being removed from centralized exchanges? Do you think the withdrawals are from people anticipating The Merge, or do you think they’re being caused by people afraid to leave funds on centralized exchanges? Let us know what you think about this topic in the comment section below.
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