Coins Mining on the Same Algorithm as ETH Surge – Is the Merge Battle Still Ongoing?

The most significant upgrade in Ethereum’s history, The Merge, has officially been activated, sparking the most intense “battle” in the Ether ecosystem ever seen.

The Unexpected Reversal

At 1:44 PM on September 15, The Merge was successfully executed by the Ethereum team, marking a new chapter for ETH’s development and fully transitioning its consensus mechanism to Proof-of-Stake (PoS).

What surprised everyone was Ethereum’s rapid price surge post-Merge. The price spiked from $1,570 before the event to $1,653, currently trading around $1,628 at the time of writing.

1H ETH/USDT Chart on Binance at 2:40 PM on September 15, 2022. Source: Binance

Given the current "gloomy" market, especially with Bitcoin dropping below $20,000 amid August 2022 CPI news from the U.S., institutional and retail investors were largely aligned with the expectation that ETH’s price would decline sharply regardless of The Merge’s success.

Consequently, many investors opened substantial short positions on ETH across all exchanges, driving the funding rate for Ether down to -0.4% to -0.5%, the lowest in history.

Not only in the derivatives market, but a large amount of ETH was also pushed onto exchanges in the 24 hours leading up to The Merge, signaling a looming sell-off.

The current outcome contradicts all community predictions. In the past hour, although the total value of liquidated cryptocurrency assets was only $30.32 million, over 95% of this was ETH, with shorts suffering the most, accounting for over 80% of the liquidations.

Miners Seeking New Opportunities

It’s not just ETH riding the wave of The Merge; coins mining on the same EtHash algorithm as Ethereum using Proof-of-Work (PoW) have also seen significant benefits. Ethereum Classic (ETC) recently hit a new hashrate peak of 92.56 TH/s.

Other notable PoW projects have also achieved impressive hashrate increases, such as Ravencoin (RVN), which surged to 10.092 TH/s (35.46% increase), and Conflux (CFX), which rose by 1.6158 TH/s, a 55.74% increase in the past 24 hours.

Price Reactions Post-Merge

Following The Merge, these coins have seen strong price surges, recording at least a 5% increase or more.

1H ETC/USDT Chart on Binance at 2:40 PM on September 15, 2022. Source: Binance

1H CFX/USDT Chart on Binance at 2:40 PM on September 15, 2022. Source: Binance

1H RVN/USDT Chart on Binance at 2:40 PM on September 15, 2022. Source: Binance

The broader picture is relatively easy to understand: with ETH now operating under PoS, the previous PoW mining system for ETH using specialized mining equipment is discontinued. Miners must now switch to mining coins with similar algorithms or “cut losses” on their mining investments by selling their equipment.

Currently, both mining difficulty and hashrate for ETH have dropped to zero following The Merge.

Miners have no choice but to move to less well-known coins to recoup their mining costs. Nevertheless, there remains a glimmer of hope for miners with the upcoming EthereumPoW (ETHW) project, which plans to fork ETH and support the PoW version of Ethereum.