Our Daily Fight Club: Will Ethereum crash or rise after the move to PoS?

During the Korea Blockchain Week 2022 conference, Ethereum co-founder Vitalik Buterin said that the network’s transition to PoS could increase the popularity of cryptocurrencies. Benjamin Cowen, a famous crypto quant, famous for his accurate predictions, strongly disagrees with this statement. We decided to compare their opinions so you can make your own balanced bet.

The “It’s going to be OK” option

Buterin reminded us that previously the use of cryptocurrencies for payments was more common, but most blockchains faced scalability problems and high fees, thus discouraging users. So now, everyday payments using digital assets are not as popular, which has directly impacted their capitalization.

“Cryptocurrency payments sort of became less popular after 2018, It’s pretty clear that fees are one of the reasons why. In the future, with rollups, with all of the improvements to efficiency … the transaction costs could go down to $0.05 or even be as low as $0.2 cents,” the Ethereum creator said.

Just to remind you, Ethereum is supposed to switch to Proof-of-Stake (PoS) algorithm in mid-September. Buterin once again confirmed this approximate date while adding, “if everything goes according to plan.”

The “things won’t go according to plan” option (as it has always been)

Crypto quant and investor, Benjamin Cowen, believes that an Ethereum merger could serve to rebalance portfolios in favor of Bitcoin. Benjamin believes that Ethereum’s move from PoW to PoS will conversely increase Bitcoin’s capitalization.

Investors will withdraw capital from Ethereum and invest in Bitcoin, suggesting that the blockchain upgrade could cause Ethereum’s price to fall on negative news related to the problematic transition. We have already written that some groups of miners are getting ready to create their own altcoin, preparing in advance for the fork of Ethereum. The expert believes this problematic situation is perfect for Bitcoin, as BTC’s dominance level dropped sharply at the end of 2020 from about 73% to 41%.

“I wouldn’t be surprised if I see BTC dominance starting to come back, maybe in September, if not before. The reason is that, against the backdrop of a major event for Ethereum, it makes sense for investors to reallocate some of their portfolios in favor of bitcoin,” Cowen said.

He added that the Ethereum merger could be postponed altogether, as it has happened many times over the years. Therefore, he urges investors to prepare for the exact opposite scenario that Vitalik Buterin is trying to “sell” to the public.