Imagine Saylor's Microstrategy spent $4B to buy $ETH instead of BTC.
Twice.
And then again and again. Twice a year, in perpetuity.
The Merge at current ETH price is equivalent of two Saylor-sized ETH buys every year.
A short thread on the impact of the "Triple Halvening".
The Ethereum Merge (switch from PoW to PoS) is estimated to take place on Sep, 14.
One of the benefits of PoS is $ETH issuance reduction by 90%.
This is equivalent of 3 BTC halvings, hence "Triple Halvening".
Current $ETH issuance in PoW is 5.5M ETH/year.
With 13.3M ETH staked, it will be reduced to 0.6M ETH/year after The Merge.
4.9M new ETH won't hit the market every year!
If The Merge didn't happen, how much money per year would be needed to buy 4.9M $ETH?
ETH at $1700: 4.9M * $1700 = $8.3B
This is twice as much money as Saylor spent in total to buy BTC.
The Merge at current ETH price is equivalent of two Saylor-sized ETH buys every year.
When ETH price goes up, more Saylor-sized buys (SSB) are required:
$2000: 4.9M * $2000 = $9.8B => 2.4 SSB
$3000: 4.9M * $3000 = $14.7B => 3.6 SSB
$4000: 4.9M * $4000 = $19.6B => 4.8 SSB
Every year, in perpetuity...
(assuming the amount of staked ETH doesn't change)
Even when the amount of staked $ETH increases, the annual issuance won't go up by a lot.
ETH issuance reduction vs PoW will still be substantial.
Many Saylor-sized ETH buys would be needed to reproduce such supply growth reduction in PoW era.
Last but not least:
Buys remove coins from the supply temporarily.
- Microstrategy will likely sell its BTC in the future.
- Saylor-sized ETH buys would also end up on the market at some point.
On the contrary, ETH Issuance Reduction lowers the supply growth permanently.
The Merge activates a Greedy Eternal Multi-Saylor-Sized Buying Monster that relentlessly accumulates ETH and never sells.
And we think that The Merge is already priced in?
If you want to learn more about The Merge, read this:
twitter.com/korpi87/status/1513459657381068812
korpi
@korpi87
DeFi educator, a member of Degen Score Citadel and DeFi Omega. @tapioca_dao pearl club member lenster.xyz/u/korpi Follow me for DeFi-related topics.