Many investors believe that the Merge update to the Ethereum network scheduled for this September could signal the beginning of a sustained uptrend in the ETH price, raising the question of what will become of Bitcoin, which remains the world’s leading cryptocurrency in terms of capitalization.
However, according to renowned analyst Kyle McDonald, the consequence of Ethereum’s switch from PoW to PoS could highlight the enormous energy consumption of the Bitcoin network, which could be “regulated”, resulting in a collapse of the Bitcoin price.
As such, he advises to part ways with Bitcoin now, predicting that once the Ethereum blockchain adopts a proof-of-stake” method, investors and regulators may realize, in stark contrast, that the energy-intensive method currently used by Bitcoin and Ethereum, the proof-of-work method, is not essential to the functioning of the cryptocurrency market.
Speaking on CoinDesk TV’s “First Mover” program on Friday, the analyst spoke about the “climate crisis” and bitcoin’s massive use of energy, highlighted in the current energy crisis.
He explained that “Bitcoin doesn’t have the coordination like Ethereum to leave proof of work,” and so it could be “the first to be regulated.”
In this context,McDonald said he expects Bitcoin to never see “$69,000” again, its all-time high in November 2021.
The analyst also felt that it is “very realistic” to think that the Merge update will cause Ethereum to reduce its power consumption by 99.95 percent.
“When you go from a system that’s about generating as many random numbers as possible as fast as possible with 10 million [graphics processing units] around the world, to a system that runs on a few thousand computers that are fairly energy-efficient, the difference will be huge,” McDonald said.