In early Friday trading in Asia, Bitcoin slipped below the US$20,000 support level, and Ether experienced a sell-off following the long-awaited network “Merge” on Thursday. The top 10 tokens were all trading lower, and the market capitalization of all cryptocurrencies plummeted below US$1 trillion.
According to data from CoinMarketCap, Bitcoin dropped 2.7% in the last day to trade at US$19,707 at 8 a.m. in Hong Kong, while Ether (ETH) dropped 10% to US$1,471 – its lowest price since August 29 and the biggest drop among the top 10 cryptocurrencies.
The deployment of the final upgrade, dubbed “Paris,” which is anticipated to reduce the network’s electricity use by up to 99.95% while enhancing transaction speeds, marked the completion of the Ethereum network “Merge”.
Some investors, however, claimed that the Merge had been long priced into the Ether token, which is why it was sold after it was over.
Regarding the new network itself, Milosz Papst, director at investment research firm Edison Group, stated that “Ethereum’s early post-Merge performance looks promising with a very small number of lost blocks and a high participation percentage.”
Because the Merge would reduce their income, some Ether miners rejected it, leading to the creation of a split to maintain the old network. However, the ETHPoW, the currency for this fork, lost 71% of its value and by Thursday morning, it was only worth US$9.98.
The original chain from which Ethereum (ETH) was forked, Ethereum Classic (ETC), also fell, dropping 9.54% to US$35.61.
U.S. stocks declined on Thursday. The S&P 500 Index dropped 1.1%, the Nasdaq Composite Index lost 1.4%, and the Dow Jones Industrial Average ended 0.6% lower.
As the Federal Reserve has prioritized taming inflation, the Labor Department reported on Thursday that unemployment claims dropped in the week ended September 10 to their lowest level since May, pointing to a strong economy that may support an aggressive interest rate increase by the Federal Reserve the following week. The United States’ August retail sales data, which were also reported on Thursday, exceeded expectations with a 0.3% gain from July.
