A popular cryptocurrency analyst has suggested that Cosmos ($ATOM) could see its price nearly double if a cryptocurrency market rally is ignited by Ethereum’s upcoming Merge upgrade, which will see the network transition from its current Proof-of-Work consensus mechanism into a Proof-of-Stake consensus.
According to the host of Coin Bureau, which shared a video updating his 2.1 million YouTube subscribers, demand for ATOM has been dropping throughout the bear market, with two main drivers currently supporting its price by bringing in new buyers.
Per the pseudonymous analyst known as Guy, ATOM’s strongest demand driver are the up-and-coming Cosmos projects and the airdrops they distribute to the cryptocurrency’s community, even though some are “only given to those who hold or stake ATOM in participating wallets.”
A secondary driver, Guy added, is as a “bridge currency to all the up-and-coming Cosmos ecosystems on more general use case blockchains such as Evmos and Kava, which support Ethereum smart contracts.” These networks have hundreds of millions of dollars of total value locked on their smart contracts, the analyst said.
Nevertheless, Guy sees potential for ATOM’s price to nearly double if Ethereum’s long-awaited Merge upgrade goes smoothly, as Daily Hodl reports. He said:
Now, even though ATOM appears to have limited demand drivers, they’ve been enough to push its price higher over the last few months and if this trend continues, we could see ATOM pull close to a 2x in the short to medium term.
The Ethereum Merge, which describes the network’s current mainnet merging with the Beacon Chain’s PoS system, setting the stage for future scaling upgrades, including sharding, is expected to occur on September 15.
The move is expected to reduce Ethereum’s energy consumption by 99.95% as instead of miners, there will be validators securing the network by staking their ETH holdings. Stakers need at least 32 ETH to run block-producing nodes and earn staking yield.
As CryptoGlobe reported, Guy has recently suggested that Cardano ($ADA) could soon start outperforming the flagship cryptocurrency Bitcoin ($BTC) as traders start using the cryptocurrency to hedge against Ethereum’s transition from a Proof-of-Work (PoW) consensus algorithm to a Proof-of-Stake (PoS) one.
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