The Crypto Crash & Ethereum's Post-Merge Collapse.

crypto crash is trending on Twitter and

you know what that means lots of crypto

memes and very little in the way of

actual data or information to tell us

why the he double hockey sticks is

crypto having such a rough time after

all this rough time really started

around the time of June when Jim Cramer

started getting a little rough against

uh well crypto in General on Twitter and

uh then it was seen as a Buy Signal you

know generally people have taken a

contrarian take on Jim Cramer and

thought hey if Jim's complaining about

crypto prices in June it must be a sign

of the bottom and it was for a brief

period of time as we retraced from about

17 596 back to a high of about 25 300

for BTC mid-august nice rally that sort

of corresponded with what was going on

in the NASDAQ but we only made it from a

zero percent retracement to a 23.6

retracement that's not very good now in

nominal terms we went from about went

225 from about 17 and a half that's

about a 42 percent gain that very very

nice especially when you compare it to

the indices certainly a far cry from

what we've seen at the top of the market

back in November of 2021 so when we look

at the retracement lines from that point

of view it doesn't look like we're

getting anywhere but this is still a 42

gain from bottom but why is it then that

we're revisiting that bottom and why is

it that now post-etheria merge we're

starting to see pain again after all

take a look at the numbers Bitcoin is

down 12.57 percent over the last seven

days ethereum down almost 19 and a half

percent in just seven days sure

ethereum's proof of work token basically

old school ethereum before the old old

school token ethereum classic right

ethereum p-o-w proof of Works looks like

it's up 31.5 percent but when you go to

what it was originally around 130 to 133

dollars it's actually now only a six

dollar token it's lost a lot of course

you're going to have fluctuations along

the bottom but again it's not just these

tokens uh it's a lot of tokens look at

cardano down to 45 cents Solana down to

thirty two dollars down twelve percent

polka dot down 17 polygon Shiba Inu

Avalanche all of these down about 18 17

to 18 it's a lot even ethereum classic

dropping as much as 20 and this is where

we're going to discuss four reasons why

the crypto crash is really hurting right

now especially with ethereum number one

let's talk about ethereum so ethereum

post merge was supposed to Moon I mean

we're using less than nine less than

five percent of the energy that we're

using before some say even less than

that we're saving 95 plus percent of the

energy that we're using on proof of work

now just to operate a proof of staking

protocol it's really really quite

incredible able and there are lock-ups

for those who have staked their ethereum

into ethereum 2.0 the problem that we're

seeing now though is that the miners who

are mining ethereum who are in the

business of making money through

ethereum now face the potential risk of

bankruptcy if they have not properly

prepared themselves for this transition

because unfortunately even though after

the fork to proof of stake proof of work

remained active miners thought that the

valuation of ethereum proof of work

might actually provide some form of

income for them to slowly phase out and

close their businesses but unfortunately

when we go from 133 dollars of proof of

work ethereum all the way down to under

six dollars you don't have a lot of

assets left now of course a lot of

ethereum miners do have money staked at

ethereum 2.0 but a lot of their

additional profits at least from what

I'm hearing within the crypto industry

is especially from miners said a lot of

the profits of these businesses were not

thrown into ethereum 2.0 they were

reinvested into more chips and more

Cooling and more space so that way they

could expand their mining operations and

ethereum miners regularly believed that

when the merge came they would just be

able to transition to mining for other

proof-of-work currencies Dogecoin for

example is one of the largest proof of

work currencies now that ethereum has

moved over following of course Bitcoin

now that's remarkable because it's

Dogecoin but it's also remarkable

because not a lot of people actually

transact in Dogecoin unless of course

you're purchasing stuff from the Tesla

shop in Dosh which is pretty epic but

still kind of an expensive and

burdensome process for a lot of folks

who are not familiar with transacting in

cryptocurrencies and not seeing a lot of

transactions there therefore there's not

that much proof of work to actually do

we need volume for proof-of-work miners

in my opinion what's happening is you

have a lot of these miners who are now

liquidating assets dumping their

ethereum proof of work in almost a fire

sale to try to survive unfortunately

many of them won't and many of them will

be forced into bankruptcy and that is

unfortunately where the next phase of

ethereum comes from and that is the post

merge lockup expiration sometime between

6 to 12 months after the merge we were

told that ethereum stakers who put their

money into ethereum 2.0 and waited years

for this merge to happen we'll have the

opportunity probably entrances to start

selling their ethereum to the market

Unfortunately they chose a currently

technical recession to complete the

merge in and they may end up having a

lot lock up expiration during an actual

recession or maybe even depression at

that point just depending on when the

lockup expiration is given that there

are a lot of folks in the crypto crypto

ecosystem who have built businesses on

top of crypto who may have to liquidate

ethereum just to either stay out of

bankruptcy or to fulfill judgments or

liens unfortunately I think there is

going to be a lot of selling pressure

now I've made videos on this before the

post-etherium merge potential selling

pressure and how deep the post-etherium

merge crash could be now that could lead

if you compound that to about a 35

percent a drop in ethereum prices

because of this excess Supply but the

argument that's made in the crypto

Community is don't worry we'll be able

to absorb all of that excess ethereum

okay fine but that's partial withdrawals

and so now and this is the part that's

totally up to speculation we have to

determine how many validators who

currently have staked ethereum or Acres

who are part of validating networks how

many of them are going to fully withdraw

from the ethereum network versus

partially withdraw or just straight up

huddle obviously if everyone fully

withdraws will have problems but that's

also where ethereum developers will

likely have some form of limits

currently the limit is five validators

can withdraw completely from the network

per Epoch remember there are 225 epochs

per day now this limit could change we

might see 10 per Epoch at lockup and the

estimate here from data data data

analysts excuse me is the potential of

about a supply of 65 000 to 80 000

ethereum in addition to the partial

lock-ups per day that in my opinion

would represent an approximately 10

additional Supply hit or an additional

availability of 10 on the daily traded

volume for ethereum for probably the

first few weeks of the Theory emerge

which could Compound on top of that 32

to 35 percent from parts or partial

withdrawals now that doesn't again

necessarily mean that prices will come

down this much because again people

could be buying the dip and we could see

a lot of stability here and after all

these estimates are being brought to you

by a blog post by who someone who's

really a staunch Enthusiast of ethereum

and they're clearly very well educated

in ethereum well the writer of these

estimates themselves calls themselves

bullish in fact they say I remain as

bullish as ever they do also say that

quote a contentious and panicked unlock

event with large profit taking could

however be market

destabilizing and a relatively

long-lasting event

they're in effect warning you of the

danger to come now even though they are

bullish because they see ethereum as a

once in a generation investment

opportunity

the excess Supply that we could see

through both partial withdrawals and

full withdrawals could substantially

destabilize the ethereum network if we

don't have a clean bridge and a

limitation on how much people can

withdraw from the network some folks

think that I'm just fighting that no

worries there's plenty of volume to

absorb all of the ethereum that's true

but now and again that may be true I

should say I shouldn't say that is true

that may be true because now you have to

consider the fact that macro is not your

friend this merge should have happened

during a bull run or at least wait for a

bull market because here's what you're

up against you're up against the NASDAQ

that just barely went above a 23.6

retracement and is already falling below

that support again you're in a very

difficult macro Market why is that it's

because the Federal Reserve rather than

printing money and sending helicopter

money to everybody so that way they

could provide that volume for those

sorts of lock ups that people believe

are going to come or that lock up buying

that's going to happen around lockup

times well that is no longer happening

why because if it's instead of printing

and giving away money with the Federal

Reserve and our in our fiscal uh systems

Congress the president whatever and

stimulus well we're actually going to

see is we're seeing a Federal Reserve

vacuum taking money and liquidity out of

the system and unfortunately if you need

buyers during a liquidity crunch when

people don't have a lot of money

unfortunately you're going to probably

see prices decline even more now I'm

going to link Down Below in the

description the video that I originally

made on the ethereum merge to warn about

this potential happening and that is

what could happen after the merge now

why are prices going down now and why is

ethereum falling more than Bitcoin well

I believe bitcoin's roughly 12 decline

is roughly what you would expect for the

macro contraction that we're seeing in

stocks as well however the additional

eight or so percent you're seeing with

ethereum in my opinion is a combination

of by the rumor sell the news the event

happened we were there for the event we

had our party now we're selling and

we're moving on to another by the rumor

sell the news event but you are also

pricing in the fact that there's

probably going to be a post merge sell

down uh during a time of a lack of

liquidity now that's very unfortunate

because I don't believe ethereum

deserves that I think ethereum has

probably one of the strongest systems

for transactions at the lowest potential

cost unfortunately if a macro and post

merge liquidity are reasons one and two

for pain the next reason is we have to

remember that blockchain technology does

not equal market capitalization value

think about what I just said the

technology of a proof of stake system is

not equal to the value of all ethereum

that's very very very important hey if

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wealth so you can get started in my

opinion the difference between these two

things is blockchain technology is what

we have it's the code it's what we can

transact on it's really really good at

being secure and for anybody across the

world to be able to transact money but

that system along with all the other

things that we could do like nfts and

all the derivatives that come off of

this through other layers right

but the difference is that is kind of

like a business right if you were to

value that technology you kind of value

it like a business and if you value it

like a business you look at and say okay

what's the utility for this right and if

you're comparing the utility of this you

compare the utility of ethereum to other

things like the existing banking system

which many uh people in crypto

absolutely do not like and that's fair

but the point is it's going to have some

form of value and you have to ask

yourself is that Val that value for

ethereum in the ethereum network worth

169 billion dollars okay there's a

company called Invitation Homes they own

like

fifty thousand fifty to like 80 000

homes ethereum right now has a market

cap that is in excess of eight times as

expensive as Invitation Homes that would

be like 400 000 homes right it's pretty

remarkable so uh and I mean that's up to

you to decide whether or not that is

actually reasonable but then again

that's not the only reason people buy

ethereum it's not like you're only

buying ethereum for the blockchain

technology that could have a fundamental

value that fundamental value could be

two thousand dollars per ethereum it

could be a thousand dollars it could be

ten dollars right ten dollars we'd be

sitting at about uh one one hundredth of

the value of where we are now and we'd

be looking at about a 1.6 billion dollar

technology which is maybe the value of

Redfin and Open Door combined kind of

interesting when you put it into that

perspective there's a lot of extra value

put on top of this technology and

unfortunately that extra value has a lot

to do with speculation and it is that

well crypto went up during a stimulative

time hopefully when the Federal Reserve

u-turns then crypto will also go up

again and the day-to-day fluctuations of

the stock and crypto Market will tell

you that yes eventually crypto will go

up again we just don't know if it'll go

up from 1300 to 10 000 or if it'll go

from

300 to 500. all right we have no idea

and I'm not making any kind of

predictions but this is where a lot of

folks have to remember that hey

cryptocurrency was always thought of as

an inflation hedge that is something

that would become more valuable during a

time of high inflation the problem is

when you take away liquidity you depress

speculative value and so what we've seen

is stock market values come down now

we're seeing real estate values come

down crypto currency prices come down

speculative valuations are coming down

somewhat back to reality because

liquidity money in the system is being

taken out and this is actually why cash

right now in this kind of Market is a

better hedge than any kind of investment

against inflation because if you have

cash that you need to buy assets real

estate crypto stocks well the more

prices go down the more valuable your

cash becomes it's all dependent on what

you're comparing the cash to if you're

comparing the cash to grocery bills well

then obviously your cash is becoming

less valuable so now of course we we

know that there are other issues going

on in the cryptocurrency space as well

like the fourth issue which is

regulation we talked about the

stablecoin disaster I've been warning

about the stablecoin disaster for years

at this point but more importantly we've

got to realize that the SEC is honing in

on things like tornado cash which I've

also talked about before and honing in

on other aspects of crypto that mean the

next Bull cycle could be faced with a

lot more regulation now hopefully that's

a good thing because then we can finally

remove that as an element of fear

uncertainty and doubt anyway these are

my thoughts in terms of what the heck is

going on with crypto if you've liked

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see in the next one goodbye