Can the Ethereum price redeem itself in June? Crypto experts weigh in

Crypto investors will be keeping a close eye on Ethereum’s shift to proof-of-stake from proof-of-work protocols, with a test set for 8 June.

| More on:
Young woman using computer laptop with hand on chin thinking about question, pensive expression.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Ethereum price is down 8% so far in June
  • The world’s No. 2 crypto is shifting from a proof-of-work to proof-of-stake protocol
  • The so-called merge will be tested on public testnets on 8 June

The Ethereum (CRYPTO: ETH) price is down 6% over the past 24 hours.

Halfway through the second day of June, the world’s No. 2 token by market cap is trading for US$1,827 (AU$2,555).

That puts the Ethereum price down 8% since we kicked off the new month.

Following a 27% loss in May, crypto investors are hoping for a turnaround in June.

To get some insight into what investors might expect for the crypto in the upcoming month, we reached out to two industry experts.

A big change is coming

Jonathon Miller, Kraken managing director for Australia, told us: “While price movements matter, it’s important to focus on the innovation happening in the space during these times and it’s quite clear there is still plenty happening and lots more to come.”

On that front, he points out that:

Ethereum is set for a big change in the near future that will see it move away from proof-of-work to a proof-of-stake protocol. This is a very complex transformation and has the potential to impact the entire ecosystem, bringing with it new opportunities and new risks.

While it’s impossible to predict how this will affect the Ethereum price, we should not underestimate the impact of this change. It’s something that a lot of people will be watching very closely.

The move to proof-of-stake will reduce costs and greatly reduce energy use as not nearly as many computers will be involved under the new protocol.

8 June could see a big move in the Ethereum price

Simon Peters, market analyst at multi-asset trading platform eToro, agrees that one of the biggest factors in play for Ethereum is the upcoming merge, as the shift to proof-of-stake is called.

He said this has been “top of mind for many in the crypto community in recent weeks”.

Peters explained:

Ethereum’s current proof-of-work blockchain will merge with the new proof-of-stake Beacon Chain. This will mark the end of proof-of-work for Ethereum, and the full transition to proof-of-stake.

The Ethereum price will be one to watch next week, on 8 June.

“The merge is planned for August, but before it happens on the mainnet, a merge will be tested on public testnets. Ropsten testnet merge has been set for 8 June,” Peters told us.

But the merge is likely to throw up both headwinds and tailwinds for the Ethereum price.

According to Peters:

Once the merge is completed on the mainnet, this will effectively unlock the ETH that has currently been staked (and staking rewards earned thus far for validating new blocks on the POS beacon chain), so we could see some selling pressure on ETH trading pairs on crypto exchanges.

At the same time though if the annual staking reward yields increase post merge, this could encourage buying of ETH and in turn potentially push up Ethereum prices.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cryptocurrencies

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price

Why this Bitcoin maximalist says all other ‘crypto is a scam’

Initially introduced in a 2008 whitepaper by one or more people going by the pseudonym of Satoshi Nakamoto, Bitcoin launched…

Read more »

A hand reaching into a computer to grab digital money, indicating a rise in the use of cryptocurrency

Why an RBA-issued crypto-like currency could soon be a reality

The RBA is piloting a central bank-baked digital currency.

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin.

Can the Bitcoin price reach US$30,000 again in 2022?

Rising interest rates have resulted in significantly less institutional investor interest in cryptos.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.

Could this key metric signal more bad news for the Bitcoin price?

Crypto investors are keeping a close eye on the signals that could see the US Federal Reserve begin to ease…

Read more »

Man sitting at a desk facing his computer screen and holding a coin representing discussion by the RBA Governor about cryptocurrency and digital tokens

Is it smart to use dollar cost averaging to buy Bitcoin?

Should investors consider a DCA strategy for cryptocurrencies like Bitcoin?

Read more »

A hip young guy works at his home workstation with two screens and a gamers chair, keeping an eye on his crypto investments.
Share Market News

Bitcoin price dips in August after soaring 22% in July. What’s going on?

The greater presence of institutional investors in crypto markets looks to be adding to the correlation between cryptos and other…

Read more »

A very sad beagle cross dog lays dejectedly on a sofa with his short legs stretched out in front of him in a pose of flat defeat as he stares sadly at the camera.

Expert panel slashes 2022 outlook for Dogecoin price. Here’s why

Originally created as a joke, Dogecoin still has a market value of nearly US$9 billion despite crashing 91% from last…

Read more »

an image of a gold bitcoin and a gold ethereum coin side by side against a backdrop of a graph with reda and green bars representing rising and falling prices.

Bitcoin price dips. Is Ethereum on track to dethrone the top crypto?

Bitcoin is up 22% since 1 July while Ethereum has leapt 56% higher.

Read more »