[Bitcoin Now] Weakness Amid Tightening Concerns... Ethereum Up 2% Ahead of 'The Merge'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of the leading cryptocurrency Bitcoin is showing a weak trend. Ethereum, the top altcoin preparing for the Merge upgrade that transitions its blockchain system, recorded a rise of over 2%.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:47 AM on the 15th, Bitcoin's price was $20,148 (approximately 28.1 million KRW), down 0.70% from the previous day. At the same time, Ethereum rose 2.47% to $1,621 (approximately 2.26 million KRW).

Bitcoin's price declined due to concerns over tightening monetary policy. Following the US Consumer Price Index (CPI), the Producer Price Index (PPI) for August, released on the same day, slowed for the second consecutive month but was assessed as insufficient to ease inflation worries. The PPI fell 0.1% month-on-month, but rose 8.7% year-on-year, which was lower than the market expectation (8.9%) and the previous month (9.8%). As inflation concerns persist, expectations for Federal Reserve (Fed) tightening are gaining strength.

Ethereum is on the rise ahead of the Merge upgrade, which will switch from the existing Proof of Work (PoW) method to Proof of Stake (PoS). Proof of Work involves participating in the blockchain through computer calculations and receiving coins as rewards, while Proof of Stake means staking held cryptocurrencies in the blockchain to participate in verification and creation in exchange for coins. Analysts suggest that the Merge upgrade could partially resolve carbon emission issues, and there are also expectations that reduced supply will drive price increases.

If the Merge upgrade is successfully completed, the next step, the Surge upgrade, is scheduled for next year, which will introduce sharding. Sharding is a technology that splits data to be processed by shard chains, expected to increase Ethereum's data processing capacity and improve transaction speed and scalability.

Meanwhile, according to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, rose by 1 point from the previous day to 28 points (Fear) on the same day. Alternative's Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investment, to 100, indicating optimism.