The Ethereum network is all set for its most awaited Merge that will transform the network from proof-of-work (PoW) to proof-of-stake (PoS).
Now, as the Merge is around the corner, Brian Kelly, CEO at the BKCM investment firm, doesn’t look that confident with the network transformation.
While in conversation at CNBC in a new episode of Fast Money, Brian Kelly claims that Ethereum investors will not see any gaining any big profit and this is because of ETH’s inflation.
He is of the opinion that this event is leaning more towards the ‘sell the news’ mechanism as this is not instinctive and he claims this because usually in the cryptocurrency sector the market participants would buy the news.
Ethereum Merge Will Not Yield Profit
He then says that market participants are purchasing Ethereum because of the Merge and with the hope of gaining massive profits. But as per Kelly, it’s just not about yield, in fact, it’s just that you’re receiving your inflation amount. Hence it’s just balancing the inflation but not making a profit.
Further, BKCM CEO believes that while most of the investors and traders are excited about the upcoming Merge that is scheduled in mid-September, this will lead to a sell-off. He also says that there are chances for a failure of the merger as well and this will have the worst effect on Ethereum’s price action along with the project.
Additionally, Kelly feels that there are a lot of questions about how the apps will react if the Ethereum network gets divided again. And if that happens he warns that there might not be just one chain fork, but two or three different, hence the risk is more than the profit.
In a broader analysis of the economy, the expert talks about the connection between cryptocurrencies and the tech stock market along with highlighting the key distinctions between Bitcoin (BTC) and Ethereum.
As every other analyst and expert, Brian Kelly too believes that Bitcoin’s connection with that of Nasdaq is almost near 60% whereas Ethereum’s is 70% seen in the last month.
Given that Bitcoin itself is not a tech stock, he believes there may be some variation here. Undoubtedly, it is an alternate form of money and digital gold. Then he continues that when the nation demolishes its currency, as many governments do nowadays, this currency will come into force.
Conversely, he feels that Ethereum is kind of a tech stock itself as it will shatter most of the things the present tech stocks are doing.
At the time of reporting, Ethereum is selling at $1,555 after a drop of 0.73% over the last 24hrs.