Ethereum to Become More Attractive to Institutional Investors After Merge

Raoul Pal, a former executive at Goldman Sachs, recently explained why Ethereum is still a safe allocation for investors. Pal has had a series of working experiences from his co-management role at Goldman Sachs to GLG Global. He is currently the CEO of Real Vision, a financial video channel that he founded with a partner in 2014.

The Merge is Closer and Definite

The long-awaited Ethereum Merge is now anticipated to be finalized by the 15th of September. The Merge is the translation of Ethereum’s network from its current proof-of-work system into a proof-of-stake. The Merge had been postponed severally as a result of technical delays and inaccuracies.

The Ethereum Foundation gave an explanation of the Merge as a representation of the process that joins Ethereum’s current executive layer with its proof-of-stake layer, Beacon Chain. The current layer in the mainnet that’s in use as it is. The new chain will reduce the network’s electricity consumption, but it will make the network more secure with staked ETH.

The Foundation described it as a really exciting phase in actualizing Ethereum’s goals. These goals are listed as better security, sustainability, and improved scalability. It is noteworthy that, at first, the Beacon Chain operated differently from Ethereum’s mainnet.

Ethereum’s mainnet keeps all accounts, smart contracts, balances, and blockchain conditions on the proof-of-work system. This continues even though Beacon Chain keeps a parallel operation on proof-of-stake. The expected Merge is when both operations are integrated, and proof-of-work is completely replaced with proof-of-stake. 

The Digital Spaceship

The Foundation went further to create an analogy where it says to imagine Ethereum being a spaceship that is not completely ready for any interstellar travels. The community has been able to build a new hardened hull and engine using the Beacon Chain. It is now almost time that the new engine will be put into the spaceship instead of the old one.

The operation will merge the powerful engine into the spaceship that exists. And it will be ready to begin its interstellar journey.

Pal spoke with Bill Barhydt in a recent podcast on “Money Talk.” He said he expects the Merge to instigate a huge supply shock that he thinks will favor the asset’s price.

According to him, many institutions did not go into Bitcoin because of environmental and government concerns. The proof-of-stake movement is going to eliminate that concern. Ethereum processes a yield, and it is something institutions are going to like.