Ethereum Merge: Good For Wall Street, Bad For Nvidia

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Last Updated on 5 September 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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In some ten days from now, the Ethereum Merge is upon us. This could be good news for Wall Street investors, and bad new for crypto miners, especially chip maker Nvidia. After Bitcoin, Ethereum is the network that is most critical for crypto’s infrastructure. Third party apps sit on its blockchain in huge numbers, and the merge will surely impact all of them as well.

Sami Kassab, an analyst for crypto research firm Messari admitted that:

The Merge is the most significant upgrade in crypto history. It’s similar to changing the engines on an airplane in midflight. One flaw in the code could wreak havoc on the crypto ecosystem.

Advertentie.

ESG

Critics of the crypto industry’s massive waste of energy consumption will soon be (partly) silenced. ESG (Environmental, social and corporate governance) proponents will have to admit that Ethereum’s switch from proof of work, where computers use energy to solve cryptographic puzzles and thus consume lots of energy, to proof of stake, which consumes almost no energy, is very ‘green’.

According to the Ethereum Foundation, the Merge will cut Ethereum’s energy usage by more than 99% reducing the network’s carbon footprint to almost nothing.

This will enable more Wall Street firms to invest in Ethereum, as environmental issues should be (hopefully) solved because of the switch.

Mining losers

However, there are also losers to the process. Biggest of them all could be mining companies which in the past few years alone have spent hundreds of millions of dollars on hardware to serve amateurs crypto miners. Their equipment may now be rendered worthless.

Chip maker Nvidia, which was hit by bad news this week when the US forbade it from exporting AI chips to China, could also take a hit. Last year, Nvidia developed graphics chips and cards that were widely used to mine Ether. An analysts for investment bank Baird say the Ethereum Merge is likely to “generate a wave of mining GPUs graphics processing units on the secondhand market, compounding the inventory woes.”