Is the Merge Priced In?

Bankless Nation, I hope you are ready for another State of the Nation episode where we do a deep dive on an important topic. This topic is near and dear to our hearts, and it's coming right up. Uh, the question of the merge. Specifically, the Ethereum merge. Is the merge priced in? That's the question we want to get to the bottom of today. David, who do we have on? What are we gonna talk about?

Yeah, we have two bulls, two Ethereum bulls that are both bullish for the same reasons. Uh, we got Hellpress, who's been on the show before, and Ryan Beckerman's, who's just talked a lot about this structural supply change that proof of stake brings to Ethereum, just like Hell Press does. So these two bulls are looking at the same data and they're bullish for the same reasons, yet they differ in their time horizons. So on today on the episode, we get to talk about how bullish can we be? Can we be like super bullish or can we only be just like, you know, cautiously optimistic bullish? Uh so that's gonna be the subject of today's show. Uh, I think it's gonna be a fun one. Uh, especially when, like, you know, usually debate formats are like, no, I disagree on absolutely everything. This is uh, no, we agree on like all the facts and circumstances, it's just a matter of time frame.

The details,

Yeah really. Yeah.

the timing, the details. That's what's important. I think that's what everyone's trying to figure out is like, is the merge already priced in or not?

Exactly.

Like how long is it going to take for the merch to be priced in? I know Hal has some uh fundamentals that he likes to look at, and Ryan has some great insights as well. So we're gonna get right into it. Um, but we also want to tell you about um an event that's coming up. This is a message sponsored by uh SmartCon and our friends at Chainlink. This is a conference, David. I feel like it's conference season is maybe spinning up. We've got uh an Ethereum event in October, but we have SmartCon at the end of September. This is happening in New York City on the 28th and the 29th. What is SmartCon, David, and uh who should be looking at this event?

Yes, Marcon is Chainlink's annual conference. So they do this every single year. And this is actually the first time that they will have been doing this in person. So you sort of have some uh you know crypto gigabrains that we all know and love. Stanny from uh Aave, Kane from Synthetics, Ed from uh Arbitrum, uh SBF, of course. Uh, but this is just uh Chainlink's yearly summit uh where they just put a bunch of the gigabrains who generally are all associated with smart contracts and uh and oracles and are plugged into the Chainlink ecosystem. Uh and they have a multi-day long speaking event. Um, like I said, uh 2019 or 2020 was the first one, 2021 was the second one, but 2022 will be the first in real life smart con hosted by Chainlink that'll be in New York at the end of September. Uh, there is a link in the show notes to go get your ticket. There is also a code Bankless to get, I think, something like a little over 20% off of your ticket if you so choose to go. Uh, so this will be in New York. Uh, conference season is um rotating into New York. We got smart con, we got mainnet. Uh, so this is kind of gonna be one, the one to kick this off. So thank you to our friends at Chainlink for sponsoring this message.

Yeah, it's pretty cool too. Chainlink always brings the best um the best speakers too. Eric Schmidt, going to be attending this, of course, former CEO chairman of Google as well. As uh a lot of this, David looks like a roster of uh previous bankless guests. So you got that as well. All right, David, I gotta ask you the question we start all of these episodes with, which is what is the state of the nation today?

The state of the nation, Ryan, is cautiously bullish. I think, I mean, we have on every single weekly roll-up talked about how like bullish the merge is on a fundamental level. We don't really lean into like, okay, here is what the price on the chart is going to do here at this moment in time. And so that's because I'm a little bit scared to do that. But this is it. This is macro.

Yeah, there's macro stuff, which is also a topic of today's conversation. So, Ryan, the state of the nation is cautiously bullish, and we're going to figure out hopefully by the end of this episode, how much how much I can remove that caution. Like, can I get really bullish? Is that allowed here?

David wants to remove that caution quite a bit, and we're gonna get uh, I guess, permission or some insights, some thoughts from our guests on on whether it makes sense to do that or not. We will be right back with Hal and Ryan to talk about whether the merge is priced in or not. But before we do, we want to thank the sponsors that made this episode possible.

Hey guys, we are back talking about the all important subject of whether the merge is priced in, the Ethereum merge, is it priced in or not? We've got two guests to introduce to you today. Hal Press, he's been on the show before. Hal Press leads North Rock Digital, which is a fund that Hal has set up.

That he is betting the fund on the merge, basically. That's where the capital is going. He sees a massive asymmetric opportunity that the merge brings. We had him on a bankless, I think, back in May, Hal, if I'm uh if I'm remembering correctly. And I think that episode was really influential on a whole bunch of people and how they think about the merge, mainly on whether we are being bullish enough or not. And Hal's conclusion was we are not being bullish enough. Hal, it's great to have you back on Bankless.

Thanks. I'm glad to be back. Thanks for having me back.

Uh guys, we also have Ryan Berkman's, who's also an Ethereum bull. Okay, make no mistake. Uh Ryan has been bullish on Ether, the asset, for a while. He is an investor and a community member. Someone who thinks deeply about the merge, its impact on ETH supply dynamics. He's also a developer and he's got a different position on the on the merge, but also a closely related position. Ryan, it's great to have you on Bankless.

Thanks for having me on the show, guys.

I'm going to summarize uh your takes here, but like we'll kind of get into it through the rest of this episode. I think how your position is you're bullish on the merge, both in the short run, in the medium run, and on the long run. I think, Ryan, your position is you're maybe not as bullish on the short run run price action. You don't think it's like the merge is immediately going to take us to Valhalla and from a pricing perspective. Uh, but in the medium run, in the long run, you are a bit more bullish. Have I captured that accurately? Maybe I'll start with you, Ryan. What do you think?

I think that's right.

My bullishness on the merge comes from my near certain belief that Ethereum's going to win over the medium to long term.

Yet the short term, I think, looks a little rockier for reasons predominantly outside our community's control.

And what are we talking about, just to define uh short term here, Ryan, are we talking about like what what is short term to you where where things remain rocky and w when does uh Ethereum the the merge start to get priced in?

For me,

the short term is six to 24 months.

I'm not bullish over that time period, unfortunately.

I think that there's a lot of challenges going on in the world right now. Our community is doing an incredible job to move the merge forward. And the merge represents the future of Ethereum.

So when we look at all the great stuff enabled by the merge,

it's going to put us on a path that will eventually make Ethereum the number one coin.

It will

make crypto environmentally friendly and put us on the road to really aligning with how the rest of the world works so we can

continue to build a symbiotic, broader economy of the crypto and real world economy.

However, you know, over the short term, I think uh

I think a lot of the usual suspects may get in the way, including Bitcoin's dominance and, you know, kind of the Bitcoin maxi crew, uh, as well as uh

uh Russia's war, uh, unfortunately.

Uh

and uh, you know, it sounds like the economy was not necessarily doing so great before COVID. And so uh I think I think there are potentially some some headwinds uh over the short term.

Ryan, uh, I want to just drill down on something you said because I see I think this uh symbolizes a little bit of your position. You uh you think that the macro is just a bigger deal than you know, ether, proof of stake, the merge, et cetera. And so part of the theme of this conversation, I think, is gonna be who wins merge versus the macro. And I think your position is very much macro still wins. Is that right?

That's right. I see the price of Ether in US dollars as being uh just sort of the

uh

the

ETH versus Bitcoin

multiplied by Bitcoin versus US dollar. So this is something we all take for granted in in our crypto adventure, where we we open CoinGecko every day and we look at the ranks and we look at has Ether gained on Bitcoin? And that's fantastic.

Uh

but I think that when we think about will the merge deliver the US dollar all time highs we all want.

I think there's a question of

okay, if it were to deliver the all-time highs, do we primarily see those gains as being versus Bitcoin

or and or versus

total crypto market cap? Is that total pie growing?

And my view is that both of those components are gonna unfortunately uh struggle over the short term and then just do wonderfully in the years to come.

And Hal, turning to you, can you summarize your position and perhaps also the timing on what you think uh this price action is really going to be expressed in? And also, would you say it's accurate that you believe that the merge is more powerful than macro?

Um, yeah, sure. I mean, there's a lot of different pockets to really get into there.

I'd I'd I'd characterize the time frames a little bit differently. You know, I'd sort of think about the short term as shorter than six to 24 months. To me, the short term is really

from now until directly after the merge.

Um,

and then like

a few days after that is when call it the medium term begins.

And then that probably goes runs for another

six to 12 months. And then after that, it's where the long term would begin. And I kind of think about it in those three pockets.

I think where I differ is that

I'm not as bearish on the macro as Ryan.