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Bank of America predicts Ethereum Merge will increase ETH adoption

According to a Bank of America Research Report, the upcoming Ethereum Merge to Proof-of-Stake may result in higher institutional adoption.

According to a Bank of America Research Report, the upcoming Ethereum Merge to Proof-of-Stake (PoS) may result in higher institutional usage as well as ETH institutional adoption. The Ethereum Foundation has dubbed the event “the Merge,” which will happen between September 15 and September 20. In a show of support for the upcoming Ethereum Merge, Google has included a new countdown timer that displays the amount of time left until it occurs. 

Bank of America claims that once the Ethereum blockchain switches, investors who are banned from buying PoW-based cryptocurrencies may be allowed to buy Ether (ETH). Additionally, after the transition is complete, the Bank of America (BAC) predicts that both financial institutions and ETH may benefit greatly. 

The Surge is made possible by The Merge, the first of five upgrades planned for the Ethereum blockchain. Some institutional investors who were previously banned from buying tokens that run on blockchains that use the PoW consensus mechanism may now be able to buy ether (ETH) for the first time thanks to the significant decrease in energy consumption that followed the Merge, according to the report.

Ethereum PoS eliminate crypto mining negative environment effects: Bank of America

According to the Bank of America research report, proof-of-work (PoW) crypto mining systems, like Bitcoin (BTC), have frequently come under fire for their negative environmental effects. Thousands of nodes consume an enormous amount of energy to be operational. Many organisations and people are unable to invest in things that harm the environment. However, Ethereum (ETH) has long planned to migrate to a Proof-of-Stake (PoS) form of consensus.

For many institutions, the environmental features of cryptocurrencies represent a significant hurdle. Therefore, by eliminating its mining requirements, Ethereum makes it possible for several institutions to invest in the asset.

Ethereum PoS eliminate crypto mining negative environment effects: Bank of America
Ethereum PoS eliminate crypto mining negative environment effects: Bank of America

According to Bank of America analysts, the ability to stake ETH and offer a higher-quality payout as a validator, or through a staking service, may also have an impact on institutional adoption. Institutional adoption may also be influenced by the possibility to stake ETH and provide a higher-quality income (lower credit and liquidity risk) as a validator or through a staking service as opposed to on block-box lending and borrowing apps, according to analysts Alkesh Shah and Andrew Moss.

Ethereum Merge to boost Ethereum usage: Bank of America

It’s very possible that the combination will make ETH more widely accepted. Changing one’s environmental practices causes a significant adjustment in perspective. Additionally, it could be simpler for businesses to invest in a resource that is less harmful to the environment. The Norwegian central bank has disclosed that Ethereum serves as the foundation for the CBDC (Central Bank Digital Currency).

PoS systems already exist, such as Cardano (ADA). They may have already gambled on ADA if the question for such enterprises was PoS vs. PoW. In contrast to ETH, however, ADA does not have the same application footprint. That could be one of the causes of the delay.

According to Cryptoshrypto market cap data, Ethereum is trading at $1,724.84 with a 24-hour trading volume of $16,755,550,088. Ethereum is down 0.97% in the last 24 hours.

Read more at Cryptoshrypto:

Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.
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