Why Ethereum Price is Under More Pressure After Gensler Comments – Cryptonews

Why Ethereum Price is Under More Pressure After Gensler Comments – Cryptonews

Blockchain Crypto Market Technology
September 21, 2022 by Coinvasity
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Ethereum has successfully made its historic transition to Proof-of-Stake, but the asset’s price action is not responding favorably to the move, partly due to SEC Chair Gensler’s recent comments on staked assets being regarded as securities.Following years of anticipation, the crypto community has been greeted by the Ethereum Merge. The event has often been described
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Ethereum has successfully made its historic transition to Proof-of-Stake, but the asset’s price action is not responding favorably to the move, partly due to SEC Chair Gensler’s recent comments on staked assets being regarded as securities.
Following years of anticipation, the crypto community has been greeted by the Ethereum Merge. The event has often been described as the most historic event within the crypto space in recent times. 
Notwithstanding, Ethereum’s transition to a PoS consensus mechanism means the network will utilize stakers for block validation. The SEC thinks this might make the asset a security, according to a report by Bloomberg.
Despite failing to specifically mention Ether, Gary Gensler’s recent remarks on assets on a PoS blockchain fit the description of Ether. According to Gensler’s speech on Thursday, tokens that require investors to stake them in order to earn yields are likely to be regarded as securities. Gensler noted that this modus operandi fits a business model common with assets under securities laws.
Staking a crypto asset involves depositing a portion of one’s assets in a pool as a way of contributing to the security of the network. This approach of block validation is a distinguishing feature of a PoS blockchain, as opposed to mining with PoW blockchains.
Despite being much less energy-demanding, assets utilizing PoS might start seeing some heat from the SEC, now including Ether. It bears mentioning that prior remarks and reports from American authorities have often regarded the two largest digital assets, Bitcoin and Ether, as commodities.
Notwithstanding, these reports came at a point when Ether, like Bitcoin, still utilized mining for block validation. Gensler reiterated that Bitcoin remains exempt from the SEC’s regulatory policies, as it is not a security. Nonetheless, the 64-year-old ex-investment banker chose not to reveal a definite stance on Ether.
The price of Ether has not reacted as favorably as most proponents expect, due in large part to Gensler’s comments and centralization concerns. The Ethereum Merge was triggered at block 15,537,393 on September 15, at 06:42:42 (UTC). 
A few hours after The Merge, Ether got knocked off the support at $1,600. Following the drop below $1,600, Ether plummeted beneath the next major support at $1,500 the following day. Ether’s abysmal performance represents a reversal of the expectations of the majority of the crypto community.
Gensler’s comments have pumped a massive wave of FUD into the Ethereum community, as several proponents dread a similar case to Ripple’s current legal battle with the SEC. While the broader crypto market is not particularly performing well, Ether’s 17.5% dip in 7 days makes it the largest-losing asset in the top 30 list within a week. 
Besides Gensler’s remarks, several post-Merge metrics have raised fresh concerns about a centralization issue with Ethereum’s PoS model. A few hours following The Merge, crypto data provider Santiment revealed some disturbing metrics on its Post-Merge Inflation dashboard.
Per data from the dashboard, it appears up to 45.15% of nodes run on the Ethereum PoS network was attributed to just two addresses, raising centralization concerns. Some proponents made some unconfirmed claims that these addresses belong to the Ethereum Foundation and investment bank JPMorgan Chase.
This has also contributed to Ether’s recent underperformance. Ether currently trades at $1,424 at the time of reporting, down 3.13% in the past 24 hours. The asset has seen a free fall following its dip below $1,500. The next few days are crucial for Ether’s price movement in the coming weeks.
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