Ethereum "Merge": A Milestone from PoW to PoS
The Ethereum network successfully completed its historic "Merge" on September 15, 2022, transitioning its consensus mechanism from energy-intensive Proof-of-Work (PoW) to the more energy-efficient Proof-of-Stake (PoS). This upgrade was a crucial step in its multi-year development roadmap, aiming to enhance the network's scalability, security, and sustainability. For many ETH holders, the post-Merge price trend of the token has been their primary concern.
Short-Term Market Reaction Post-Merge: Buy the Rumor, Sell the Fact
On the day the Ethereum Merge was completed, ETH price briefly surged to approximately $1,640. However, the market quickly exhibited a typical "buy the rumor, sell the fact" reaction. Within the subsequent 24 hours, ETH price sharply dropped to around $1,450. In the three months following the Merge, ETH price remained under pressure, falling by about 25% and hitting a low of $1,209.28 on October 13, 2022. In November of the same year, influenced by macro events such as the FTX exchange bankruptcy, ETH price further declined from $1,574.80 to $1,083.29.
Mid-to-Long-Term Price Performance Review
Despite short-term volatility and declines, ETH demonstrated strong recovery capabilities in the mid-to-long term. In 2023, ETH price saw a significant rebound, increasing by approximately 91% for the year, closing at around $2,300. On April 12, 2023, Ethereum completed the Shapella (Shanghai/Capella) upgrade, enabling withdrawals of staked ETH. Subsequently, ETH price broke above $2,000, reaching a high of $2,126.32 on April 14. As of September 13, 2026, ETH price has been fluctuating between $2,456 and $2,525.4, and on September 11, 2026, it surpassed $2,600, reaching $2,660. Notably, Ethereum's all-time high price reached approximately $4,955.3 (August 23, 2025).
Impact of the Merge on Ethereum's Economic Model
The Merge has had a profound impact on ETH's economic model:
- Significant Reduction in Issuance: Before the Merge, miners and stakers collectively issued approximately 14,700 ETH daily. After the Merge, only about 1,700 ETH are issued daily to stakers, reducing the total new ETH issuance by approximately 88%, with the annualized issuance rate dropping from about 4.09% to approximately 0.52%.
- Deflationary Potential: Combined with the transaction fee burning mechanism introduced by Ethereum Improvement Proposal EIP-1559, when network activity is high and average Gas fees reach a certain level, ETH's net inflation rate could fall to zero or even become deflationary, making it a potentially deflationary asset.
- Improved Energy Efficiency: The Merge reduced Ethereum's energy consumption by approximately 99.95%, significantly enhancing its Environmental, Social, and Governance (ESG) profile, which is crucial for attracting institutional investors.
- Staking Yield: Under the PoS mechanism, ETH holders can earn rewards through staking, giving ETH properties similar to bonds or premium commodities. The expected increase in staking yield has also attracted more investors to participate.
Market Views and Influencing Factors
Cryptocurrency analysts generally believe that the short-term decline after the Merge was a typical market reaction to an anticipated event. In the long run, most views are optimistic about ETH, believing that its energy efficiency, deflationary potential, and status as the foundation for global decentralized applications will lead to sustained value growth. Institutions like Fidelity Investments have also noted that the Merge could promote ETH's deflation. However, some cautious views suggest that the Merge did not directly address high Gas fees or transaction speed issues, with these improvements awaiting future upgrades like sharding. Meanwhile, macroeconomic conditions, such as global inflation and interest rate policies, continue to have a significant impact on ETH price.
Conclusion
The Ethereum Merge is undoubtedly a major milestone in the cryptocurrency space. While ETH price experienced a short-term "buy the rumor, sell the fact" correction after the Merge, its price has significantly recovered and reached new highs in the mid-to-long term. The economic model optimization, improved energy efficiency, and staking mechanism brought by the Merge have laid the foundation for ETH's long-term value. However, like other crypto assets, ETH's price will continue to be influenced by a combination of macroeconomic environment, market sentiment, and future technological developments.
