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While there’s 50 days left until the week of September 19, the crypto community has been discussing whether or not Ethereum developers will delay the penciled-in date for The Merge. Moreover, on July 27, the crypto hedge fund Galois Capital published a survey on Twitter that indicates more than 33% of the survey’s respondents think Ethereum could split in two once again.
After the so-called penciled-in date for The Merge was announced, the price of ethereum (ETH) and ethereum classic (ETC) skyrocketed in value against the U.S. dollar. The Ethereum developer and Beacon chain community director, Superphiz, explained that the “timeline isn’t final,” but the planning timeline he shared said The Merge could be implemented on the week of September 19. Essentially, The Merge will finalize the transition from a proof-of-work (PoW) chain to a proof-of-stake (PoS) consensus model.
Almost immediately after the announcement, the price of ethereum jumped considerably higher after previously suffering from the bear market downturn. ETH has gained 62.4% against the U.S. dollar in the last 30 days. However, with the date getting closer there’s a lot less hype and people are now wondering if Ethereum developers will delay The Merge fork. The subject of delaying The Merge has been a topical conversation on social media this weekend. One individual wrote:
I think everyone’s too fixated on the September deadline for The Merge that they think everything has to be settled within the next few months. But what if the Ethereum Foundation just delays it again?
Unpopular Question:
What’s the probability of “Another Delay in Merge”? #ETH— CryptoVizArt.btc 📈 (@CryptoVizArt) July 29, 2022
There are multiple Twitter threads discussing the possibility of The Merge getting delayed and a myriad of theoretical scenarios. One individual named Chris who calls himself a “retired degen” published a thread that shows the upsides of The Merge if it is successfully implemented with no issues.
Hedge fund guy discovers Ethereum last week: “delay the Merge, you really need to rethink this roadmap thousands of people have been executing against for years” https://t.co/8Vdnq6XYaA
— Mike D🫡das (🏌️
️, ⛳️) (@mdudas) July 31, 2022
Chris insists The Merge would drop the blockchain network’s energy use down 99.95%, it will make ETH deflationary and institutional investors will flock to the project. However, Chris further remarked that a bear scenario could take place if The Merge is delayed again.
“A low probability bear scenario is if the merge is delayed, AGAIN,” Chris explained. “A delay isn’t highly probable because the Devs are quite confident enough to set a date for the event. But then some testnets are yet to be migrated from PoW to PoS. Namely Ethereum’s Goelri and Sepolia.”
In addition to the large number of Twitter discussions talking about The Merge being delayed, the crypto hedge fund Galois Capital has shared a survey that asks whether people think Ethereum will split into two chains after The Merge is implemented. 53.7% of the survey’s respondents said The Merge will go smoothly but 33.1% thought the chain could split. If it did split there would be a PoW and PoS token even though a PoW version of ETH already exists.
Question 1: What happens during the merge? If Choice 2 or 3 go to Questions 2-5.
— Galois Capital (@Galois_Capital) July 27, 2022
The Ethereum Classic (ETC) network was introduced after the fork in 2016 to remedy the DAO hack and the Galois Capital survey shows that 51.8% of the respondents think ETH miners will transition to ETC.
Just delay the merge/fork and sort this out.
— Galois Capital (@Galois_Capital) July 31, 2022
The Galois Capital survey also asked if there was a non-trivial chance stablecoin company Tether would support a PoW token that splits away from the PoS ETH network. However, Tether CTO Paolo Ardoino said on Sunday that Tether plans “to support ETH2.” Ardoino also stressed that “support of ETH2 will be seamless” and he added:
It’s not about what I/we prefer between PoW/PoS. Stablecoins should act responsibly and avoid disruption for users. Especially for [decentralized finance] it’s really delicate.
What do you think about the recent discussions revolving around The Merge upgrade and the questions about the possibility of Ethereum splitting into two chains? Do you think The Merge will be delayed or have issues when the upgrade is implemented? Let us know what you think about this subject in the comments section below.
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On July 29, the U.S. Bureau of Economic Analysis reported on America’s personal consumption expenditures (PCE) price index for the month of June, and the figure saw the largest 12-month increase since 1982. On the same day, Stanford University’s senior fellow at the Hoover Institution and professor of economics, John Cochrane, said the Federal Reserve should increase rates above 9% to tame inflation.
The U.S. economy continues to look gloomy every time a new economic report or data is released to the general public. In mid-July, the Bureau of Labor Statistics Consumer Price Index (CPI) report was published, and it revealed June’s CPI data reflected a record peak 9.1% year-over-year increase. On July 27, the U.S. Federal Reserve hiked the federal funds rate by 75 basis points (bps) in order to help curb the red hot inflation.
Two days later, the Bureau of Economic Analysis (BEA) released the closely watched personal consumption expenditures index data otherwise known as PCE. The PCE index saw the largest 12-month jump rising 6.8% in June, an increase that hasn’t been recorded since January 1982.
“From the same month one year ago, the PCE price index for June increased 6.8 percent,” the BEA report details. “Prices for goods increased 10.4 percent and prices for services increased 4.9 percent. Food prices increased 11.2 percent and energy prices increased 43.5 percent. Excluding food and energy, the PCE price index increased 4.8 percent from one year ago,” the government entity’s records note. The BEA plans to release results from the National Economic Accounts annual update on September 29.
On the same day, the economist John Cochrane did an interview with Kitco’s newsdesk and said the U.S. central bank should bump interest rates higher than 9%. Cochrane further remarked that a gold or bitcoin standard would not be able to control inflation. The professor of economics at Stanford University said that the “consensus view” was that the Fed should hike rates “substantially above” the 9% region.
“That means, right now with 9 percent inflation, economists are talking about 10, 11, or 12 percent interest rates to bring [prices] down,” Cochrane remarked. “I think the Fed and markets are counting on a lot of inflation going away on its own without interest rates having to go quite that high,” the Stanford economist told Kitco News anchor David Lin.
Lin also asked Cochrane about a gold standard or a bitcoin standard used to control inflation. “Sorry, no,” the economist replied. “Under the gold standard, there was a lot of inflation and deflation. 10 or 20 percent ups and downs of inflation and deflation, but every inflation was then matched by a deflation. I’m sorry, we’re not going back to gold.” Cochrane believes the Fed needs to implement tighter fiscal policy in order to combat inflationary pressures.
As far as a bitcoin standard, Cochrane said it was an awful idea and insisted bitcoin (BTC) is “worthless.” “That’s a terrible idea,” Cochrane said in his interview with Lin. “In terms of financial technology, Bitcoin is an attempt to revive gold, something intrinsically worthless that people only hold onto because it’s rare… Bitcoin is also very poor for making transactions itself, since it’s so computationally intensive.” Cochrane concluded:
The best answer is our governments should start running sober fiscal and monetary policies, and pay more attention to keep inflation under control.
What do you think about the latest PCE data and the economist John Cochrane’s opinion? Do you think improved fiscal and monetary policies can help tame U.S. inflation? Let us know what you think about this subject in the comments section below.
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