The correlation between Google searches for bitcoin and the price of bitcoin is fairly well established. The more searches there are, the higher the price goes.
Last month, Google searches for “ethereum merge” hit an all-time high. And sure enough, the price of Ethereum went up. So what is the Ethereum merge? And why is it impacting Ethereum’s price?
Right now, Ethereum operates on what’s called a proof of work (PoW) protocol, as does bitcoin. Unfortunately, the way Ethereum works using this protocol has proven to be too expensive and inefficient to reliably use at scale. So Ethereum, the blockchain platform that is most used in DeFi (decentralized finance) and NFTs (non-fungible tokens), has decided to move to a proof of stake (PoS) protocol. The official shift from PoW to PoS is known as the merge. It’s supposed to take place probably this June. The hope and belief of the Ethereum community is that by shifting to a PoS protocol, Ethereum will become much quicker and much more efficient to use. As a result, it can be scaled up to become the backbone of the decentralized blockchain universe.
The increase in Google searches for Ethereum merge suggests investors are also increasing investment in Ethereum. If Ethereum’s post-merge potential is anything close to what it promises, the price movements in March might be just the beginning of a long bull-run.
Sven Franssen