The tentative set date for The Merge, revealed by Ethereum developer Superphiz, is less than two months away, and the announcement apparently prompted a number of developments to happen. First, the network’s native token ether saw a significant increase in value, and second, Ethereum’s hashrate has fallen 18.21% since June 30. Data also shows that the amount of ethereum stored on exchanges has seen a massive decline, as approximately 25.1[ads1]3 million ether were once held on exchanges on July 5, and today there are only 22.77 million worth close to $35 billion.
Data shows that significant amounts of Ethereum have been withdrawn from centralized exchanges
On July 9, 2022, Bitcoin.com News reported on the delayed difficulty bomb and the fact that The Merge would be pushed back at least until September. The merger is basically the upgrade that finally transitions the Ethereum (ETH) network from proof-of-work (PoW) to proof-of-stake (PoS).
There are now two chains, with one still leveraging PoW, and the Beacon chain designed for PoS. On the same day, it was reported that 13,012,469 ETH were deposited into the ETH 2.0 contract. Since then, 136,416 ether have been deposited into the contract and there are 410,903 validators.
On July 14th, software developer and Ethereum Beacon chain community director, Superphiz, revealed the possible date for The Merge and the timeline noted that it could take place during the week of September 19th. However, the developer emphasized that the date was 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 30 days, as The Merge strengthened the price of the smart contract platform. Amidst the price jump, Ethereum’s hashrate also fell, falling below the 1 petahash per second (PH/s) or 1000 terahash per second (TH/s) region. Computing power has improved since then, as the Ethereum network’s hash rate runs at 1000 TH/s.
Seven-day statistics further show that 2.36 million ethers have been removed from cryptocurrency exchanges since July 5, according to cryptoquant.com data. Ethereum has followed the same trend as bitcoin (BTC), as both cryptoassets have been withdrawn from centralized exchanges in large numbers in recent times.
Bitcoin.com News reported on July 10 how the number of BTC held on exchanges fell 9.109% lower than statistics recorded on May 22. Recent data shows that ethereum buyers and holders are also withdrawing large amounts of ether from exchanges. Data from Chainalysis indicates that “the change in [ethereum] held on exchanges in the last day, is 1.82M [ethereum]the highest level in over 365 days.”
The fear of merger or insolvency?
While the recent withdrawals can be attributed to The Merge, crypto investors have been removing large amounts of funds from exchanges due to crypto companies having 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 stopped withdrawals.
— TF (@TF_826) 15 July 2022
People who held crypto assets on platforms like Celsius and Voyager Digital, for example, saw their accounts frozen. Fear of losing funds to an insolvent crypto platform has probably caused a wave of withdrawals like no other before. During the first week of July, Blockfi CEO Zac Prince told the public that while the company had no exposure to Celsius, it caused a significant “increase in customer churn” on the Blockfi platform when Celsius froze operations.
While the insolvencies have caused significant losses across the digital currency economy, crypto veterans have scolded newcomers for not holding their assets in a non-custodial manner. The insolvencies and bankruptcies have also started an increase in people tell others the saying “not your keys, not your coins”.
What do you think about the large number of Ethereum being removed from centralized exchanges? Do you think the withdrawals stem from people anticipating The Merge, or do you think it’s caused by people being afraid to leave money on centralized exchanges? Let us know what you think about this topic in the comments section below.
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