The Ethereum (CRYPTO: ETH) price is taking a tumble.
The world's number two crypto by market cap is currently trading for US$1,508 (AU$2,246), down 8.2% since this time yesterday.
That puts Ethereum down 60% year to date and leaves the token with a market valuation of US$184 billion, according to data from CoinMarketCap.
Image source: Getty Images
Why is the Ethereum price falling?
It's far from just the Ethereum price that's falling.
In fact, only two of the top 100 cryptos by market cap are in the green over the past 24 hours.
This again mirrors the action we're seeing across other risk assets.
The tech-heavy NASDAQ, a good proxy for investor risk appetite, fell for a seventh consecutive trading day yesterday (overnight Aussie time), closing down 0.7%. And futures indicate the index is in for another decline tomorrow.
The NASDAQ is now down 27.1% in 2022, a bit less than half the Ethereum price loss.
The reason, as you're likely aware, remains investor concerns about high inflation, fast-rising interest rates, and possible recessions looming in the United States and European Union. None of which look to benefit cryptos or other risk assets in the short-term.
What about the Merge?
The Ethereum price has been outperforming the likes of Bitcoin (CRYPTO: BTC) over the past few months as investors eye the upcoming Merge, slated for 15 September.
The first stage of the process went live yesterday.
If you're not familiar, the Merge will see the Ethereum blockchain transition from proof of work (POW) to proof of stake (POS). Under POS, a much smaller number of validators will stake some of their Ether holdings to verify transactions and secure the blockchain.
Supporters say it will be faster, cheaper, and use far less energy than the current POW protocol.
Many crypto investors are also hoping it will offer some sustained tailwinds for the Ethereum price.
Though that remains to be seen.
Commenting on the Merge, eToro's market analyst and crypto expert Simon Peters said:
With the Merge just over a week away, many are now starting to speculate as to how the blockchain will operate – and how successfully – moving forward. However, some analysts now expect the switch to proof of stake to lower its energy consumption, potentially by 99%. For context, this would equate to the electricity consumption of Portugal.
