Independent researcher Kyle McDonald gave this prediction based on the amount of energy consumed during the mining of digital assets. According to him, the BTC network may be regulated away due to its energy consumption and therefore lead to a price collapse.
The Merge is a transition from the Ethereum (ETH) proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The PoW was the consensus mechanism that was previously utilized by the ETH network. One of the objections of the PoW is the amount of energy that is being expended and its effects on the environment.
To enumerate, the energy required to mine only one BTC is enough to power an average American home for a few years. Another criticism of the PoW mechanism is the level of centralization that it offers.
Crypto investors are always on the lookout for a decentralized system which makes the ETH network their last resort.
Bitcoin Proof-of-Work Consumes More Energy
Following the tentative launch of the Merge, many tests have been ongoing on various public testnets.
The Merge will finally get launched on the ETH Mainnet with the Beacon Chain PoS consensus mechanism. Once this happens, the rate of carbon emission will be reduced to up to 99.95%. According to the Ethereum Foundation, while carbon emission reduces, the gas fee will not be affected in any way.
“The Merge is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees.” the Foundation said explicitly.
Therefore, once investors find out that ETH now uses a PoS mechanism while bitcoin still utilizes PoW, they are likely to dump the coin. They will see that the energy-intensive consensus mechanism was not necessary in the first place.
Again, Kyle has said “Bitcoin doesn’t have the coordination like Ethereum to leave proof-of-work,” it could be “the first to be regulated away.”
Correspondingly, he advised investors to sell off their bitcoin before the Merge finally gets launched on the 19th of September. Solely based on his predictions, he claimed the BTC may never see $69,000 which was its closing price at its peak back in November 2021.