Daily Digest - 15th September 2022

Headline

▌The ‘Merge’ Has Arrived — Wednesday Is Your Last Chance to Buy Ether Before Historic Makeover

The years-in-the-making, systemwide upgrade to the ethereum blockchain is set to roll out on Wednesday, marking one of the crypto sector’s most historic events to date. Leading up to the overhaul, investors have been jumping into ether, the native token to ethereum. Whether to buy now or wait and see how the merge goes depends on an investor’s time horizon for holding the coins, said Jaydeep Korde, CEO of ethereum infrastructure builder Launchnodes. Korde tells CNBC that traders who plan to sit on their stake for the long term — in the range of two to three years — should be in good shape. With the upgrade, ethereum won’t become faster, cheaper or more scalable. One developer even told CNBC that if the user experience feels the same, that will be one sign that the merge was a total success.

Cryptocurrency

▌Michael Saylor: Bitcoin Is Far Less Energy-Intensive Than Internet Giants Such as Google

Michael Saylor published a long article on his personal website, sharing some views on Bitcoin mining and the environment. About $4-5 billion in electricity is used to power and secure the $420 billion Bitcoin network today, with the output valued at 100 times the cost of energy input, he said. This makes Bitcoin far less energy intensive than Google, Netflix or Facebook, and 1-2 orders of magnitude less energy intensive than traditional 20th century industries such as aviation, logistics, retail, hospitality and agriculture. He also mentioned that 99.92% of the world’s carbon emissions are due to industrial energy uses other than Bitcoin mining. Bitcoin mining is neither a problem nor a solution to the challenge of reducing carbon emissions.

▌Global Crypto Adoption Index: Emerging Markets Lead Global Crypto Adoption in Bear Market

According to Chainalysis’ 2022 Global Crypto Adoption Index, emerging markets with Vietnam at the lead drove global crypto adoption in the last year. The global cryptocurrency adoption rate has slowed down during the bear market this year, but the slump has not erased the increase in the adoption rate during the bull market. Crypto use globally remains higher than pre-bull market levels with emerging markets leading the way, according to the Chainalysis report.

Key Economic Event

▌JPMorgan: The Probability of the Fed Raising Interest Rates by 100 Basis Points Next Week Is Less Than One-Third

JPMorgan Chase & Co. chief U.S. economist Michael Feroli said the Fed officials are unlikely to raise rates by 100 basis points when they meet next week. “We think the odds of a 100 basis-point move -- though certainly not zero -- are lower than a third,” he wrote in a note to clients Wednesday. “Good drivers don’t increase their speed as they get closer to their destination.” A 100 basis-point hike would mean an even-higher peak for the Fed’s benchmark rate above 5%, which Feroli doubts. He also warned that tightening the brakes on monetary policy now could bolster bets on a rate cut by the Fed in 2023. That will make the Fed's job of responding to price pressures by easing financial conditions more difficult.