Some have predicted how the switch could positively affect Ethereum.
Bullish signs include an increase in Ethereum Name Service (ENS) subscriptions over the past four months. Many see this as representing higher demand for Ethereum.
The recent decline was triggered by news of U.S. OFAC sanctioning Tornado Cash, leading to concerns about censorship and centralization.
Some industry insiders have pointed out that 66% of Ethereum’s beacon chain validators can comply with these requirements.
I want to shed light on a few questions that I think have been whitewashed by the #Ethereum community over past couple of weeks.
While I'm extremely excited the Merge is happening, I'm also extremely worried we have not answered CRITICAL questions.
esp in light of recent news
— eylonverse X 🏴 (@TheEylon) August 14, 2022
But Coinbase CEO Brian Armstrong has stated that the company will shut down its staking services if regulators ask them to moderate transactions.
If regulators ask you to censor at the #ethereum protocol level with your validators will you:
A) Comply and censor at protocol level
B) Shut down the staking service and preserve network integrity https://t.co/UYVR2L6tB1
— Lefteris Karapetsas | Hiring for @rotkiapp (@LefterisJP) August 14, 2022
However, it is unlikely that this is the only reason why the value of Ethereum has fallen over the past seven days.
Over the past seven days, cryptocurrency market capitalization has been slumping. According to Coingecko data, Bitcoin has lost about 13 percent of its value over the past week.
Other major cryptocurrencies such as Polkadot, Solana, Cardano, Ethereum Classic, Avalanche, and Polygon also dropped by double digits over the same time period.
However, there are some signs of recovery in the last 24 hours. The overall cryptocurrency market cap increased by 0.3%, with a trading volume reaching more than $76 billion.
But Ethereum has yet to fully recover. It is currently trading at $1,587, with a nearly 2% drop in value over the past 24 hours.