Ethereum Co-Founder Joe Lubin Tells The Reason Behind ETH Price Drop Since The Merge.
Joe Lubin, Ethereum co-founder and CEO of ConsenSys, spoke with Decrypt’s Dan Roberts on October 4 about the Ethereum merge and its aftermath, and what’s stifling the crypto market.
The Merge Aftermath
On September 15, Ethereum switched from proof of work to proof of stake without a hitch, resulting in 99% less energy usage.
The Ethereum merge went “what seems to be flawlessly,” Joe Lubin said.
Since the merger, Ethereum has fallen by a brutal 22% in the month. He says the price movement after the merge was likely to be caused by an inevitable “sell the news” type of action, as well as some Ethereum miners “unloading their ether inventory” as their rigs were shutting down.
The Macroeconomic is The Culprit Behind Crypto Price Drop
The macroeconomic factors are behind the continued decline in ETH and Bitcoin since then. “The economy is broken, and it’s likely to remain broken for a while. So we remain the tail that is being wagged by a very sick dog: the global macro situation,” he said.
He added, “But our ecosystem and our company are doing quite well, even with with reduced volumes, reduced intensity. I think we’re all enjoying just building.”
In the crypto ecosystem right now, it’s the preferred explanation for almost all founders, since crypto markets continue to suffer from the same economic headwinds in the US such as inflation, Fed interest rates and globally including war in Ukraine, COVID-19 hangover that are weighing on stocks, bonds, and other more established investments.
In contrast, Lubin and other cryptocurrency builders remain optimistic about the key aspects of the crypto industry.
“I think NFTs still have a ton of legs, NFTs are going to undergo so much innovation,” said Lubin.
He added, “I imagine we’re post our irrational exuberance moments with respect to DeFi. I think it’ll continue to innovate and mature quite significantly, but I think the real building will be in the development of the Web3 economy.”