Ether Lags Bitcoin in Countdown to Revamp of Ethereum Blockchain

tech.hindustantimes.com:

The cryptocurrency market is flashing some signs of caution with just two days to go before a critical software upgrade of the Ethereum network, the sector's most commercially important blockchain.

The wariness is evident in the way Ether, the network's native token, is lagging Bitcoin of late: the second-largest digital asset is down about 13% in the past month, compared with an 9% drop in Bitcoin. The gap between a gauge of expected volatility in Ether and a similar index for Bitcoin is also elevated.

At issue is whether the blockchain's revamp, which is designed to dramatically shrink its energy use, goes smoothly or not. There is also a risk that an Ether jump since mid-June driven partly by hype around the update -- known as the Merge -- will continue to fizzle once the upgrade is done and dusted.

While it seems unlikely, “we can't rule out a buy-the-rumor sell-the-fact playing out” around the Merge, Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note Tuesday.

Bitcoin held at about $22,270 as of 9 a.m. in London, Ether wavered at $1,716 and the MVIS CryptoCompare Digital Assets 100 Index was steady.

Ether-based investment products saw outflows of about $62 million last week, accounting for the bulk of the cash pulled from digital-asset vehicles, according to data from CoinShares.

This was “despite the improved certainty of the Merge and perhaps highlights a concern amongst investors that the event might not go as planned,” James Butterfill, head of research at CoinShares, wrote in a note.

In the derivatives market, more crypto traders are shorting Ether ahead of Ethereum's biggest technical upgrade.

Before the shift from a so-called proof-of-work to proof-of-stake blockchain, expected