Why people won’t sell the news on the merge.
For starters I’m just a random dude on the internet, no one actually knows what will happen. I have however been in finance full time for many years and been through multiple cycles, this is why I don’t feel the merge is a “sell the news event” if anyone cares. I’m going to assume since you’re here you already know what is meant by a “buy the rumor, sell the news” event so I won’t patronize, it is important to realize that the phrase comes from traditional finance where companies move slow and methodically all while Wall Street junkies try to front run the price movement in order to make a living. When a company announces they are doing a share buyback it doesn’t actually have an effect on the underlying stock immediately, the company will slowly buy back its shares over a period of months, sometimes years. You will however see, quite consistently, the price immediately skyrocketing after a buyback is announced even though nothing has fundamentally changed about the company in that moment, ergo front-running the price movement. The merge is an immediate fundamental change to way ether is added to the supply demand system, obviously there could be a quick sell off in the very short term but the current buying pressure is enough to keep eth around the $1500 level with 13,000 eth being added daily through mining. We will instantly, from one block to the next see the issuance drop to 1,600 and will have to find a new equilibrium in the price dynamics. For that amount of supply reduction, it is objectively more likely that the price will rise to find this new equilibrium rather than fall. This may seem redundant since the majority of us are here because we are bullish on eth but I felt compelled to write something after seeing endless articles and influencers claiming that the ethereum price “will” collapse post merge. Too many friends missed out on the price spike after EIP-1559 because those same people claimed there would be a major sell off that never happened. TLDR: If you believe in ethereum over the long term stop listening to YouTubers and speculators’ dogmatic guarantees that the price will collapse post merge, no one knows what will happen. Now is a great time to buy, so is next week.
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