So last night the Ethereum Blockchain went through a major change, it went from a proof of work chain to a proof of stake chain. I won’t go into the details of what those two things means there is a whole lot written about that, but I would like to point out some market dynamics around Ethereum and how investors can learn from them.
Over the last 6 months or so as the idea that the transition, or what was being called “The Merge” was going to happen Ethereum has been outperforming other crypto currencies. But today as the merge has happened successfully and the all the risks associated with it now fade into the back ground, and all the benefits that come with the merge start accruing to the network the Ethereum price is down. This is the classic buy the rumor sale the news example, the market is always forward looking, and in this case it was anticipating the successful completion of the process.
BUT the unique thing about the transition of Ethereum from proof of work to proof of stake is that it actually changes the dynamics of the market. A huge amount of Ethereum inflation and sale pressure is now removed going forward, this will be a steady long-term tail wind for Ethereum. If this price weakness continues or worsens I personally will be buying more ETH, the future of cryptocurrencies is still wide open, but Ethereum has a decent chance of being either the dominate chain or at least one of them and with this change successfully accomplished my conviction in that view is even higher.
Investing many times is about doing the opposite of what the crowd is doing having an idea of where the crowd will be in the future.
(Do your own homework on all of this stuff, but its an interesting place to explore.)