Billionaire investor Mark Cuban has revealed two reasons why he believes Ethereum’s (CRYPTO: ETH) widely anticipated Merge event this summer will be important.
What Happened: “I’m very bullish,” said Cuban in an interview with Fortune on Tuesday.
The Merge refers to the moment at which Ethereum’s main chain will merge with the Beacon Chain and the network will officially shift from a proof-of-work (PoW) blockchain to a proof-of-stake (PoS) one.
Cuban, who has declared himself an “Ethereum Maxi”, considers the Merge important for two key reasons.
The first is the network’s transition to PoS, which could significantly lower its impact on the environment as PoW mining has been subject to scrutiny from several industry watchers.
The energy consumption involved in crypto mining operations was cited as the main reason Tesla Inc (NASDAQ:TSLA) reversed its decision to accept Bitcoin (CRYPTO: BTC) as payment.
Ethereum’s transition to PoS could potentially lower Ethereum’s energy consumption by 99%.
The second reason is the change in Ethereum’s issuance after the merge. Cuban said he was particularly interested in how the lower amount of ETH issued will possibly make the asset deflationary.
Last month, analysts estimated that the transition to PoS is expected to decrease Ethereum's issuance rate by about 90%.
Cuban isn’t the only "Ethereum Maxi" who is bullish on prospects for the second-largest cryptocurrency after the Merge. Data shows that long-term ETH holders added $12 billion in ETH as its price dipped in January, fuelled by growing interest in the Merge.
Price Action: According to data from Benzinga Pro, ETH was trading at $3,341, down 4.90% in the last 24 hours.
Photo by Gage Skidmore on Wikimedia
