🤬 This $300 bn company HATED the Merge

Gm, this is the doodhwala, your favourite crypto newsletter, say it after me, “my favourite crypto newsletter!”

Why thank you 😁

Yesterday was THE MERGE. And today, it’s the AfterMERGE and we’re looking at the AfterMATH.

We hate math, but we dig the AfterMATH.

Btw there are also some cool events happening across the country in the aftermath of the merge.

💥 You can check it out here: 

So, here’s what we got for you today:

• This $300 bn company HATED the Merge

• Catch joints - win $MATIC

• Why did ETH move down after The Merge?

• Milky Meme Of The Day

This $300 bn company HATED the Merge

Alright, so the MERGE happened and everyone loved it?

Yup, there was even a rally with Vitalik bhai’s faces in BLR.

(btw I thought this was photoshop, but it ain’t 🥲)

But not everyone is loving the Merge.

Certainly not this $300 billion chip maker which manufactures chips.

No, not Lays, we talking about the chips you can’t eat, the computer kind.

Nvidia, the chip maker you think about the only time you buy a laptop is hating the transition into PoS.

Why?

Nvidia makes a graphics processing unit (GPU) chip called the RTX 30-series which are used by both Bitcoin and Ethereum miners (the PoW version).

But the chip maker’s GPU sales are slipping for 3 reasons.

• Prices DOWN: In case ya haven’t noticed, crypto prices have plummeted and crypto bros have gone broke over the last year 🥲

• Merge shift: With miners moving from an energy-intensive mining process (PoW) to an energy-conscious one (PoS)

• LAME: The prolly don’t read the doodhwala

And with the transition to PoS, even fewer GPUs will be required. Because of this a few GPUs have crashed by 50% in price in less than six months.

In fact, Nvidia’s stock price is down by nearly 60% since the start of the year. And given how heavily its revenue is tied to mining, the crypto prices are what’s bringing it down down down.

Just have a LOOK at how similar the price change of ETH and Nvidia has been in 2022

Yeah, chip makers are in for a long LONG fight.

We saw this earlier in the year when Bitcoin mining farms dump BTC to make up for losses:

• Core Scientific sold $165 million worth BTC

• Bitfarms sold $60 million worth BTC

• Argo Blockchain sold $15.6 million worth BTC

Doodhwala’s take: The crypto bear market is meeting the crypto chips market. And it’s a flavour we don’t like (like Spanish Tomato Tango).

Catch joints - win points ( in $MATIC)

Check out our favourite P2E games rn 👉 Flappy Musk and Whack A Tate

You can win $MATIC by catching 🚬  and punching Tates

Why did ETH crash after The Merge?

No big deal but Ethereum transitioned from proof of work (PoW) to proof of stake (PoS).

This was easily the BIGGEST event in crypto history. Everyone paid attention to it.

And I mean, EVERYONE.

But what everyone forgot to pay attention to was ETH, the crypto behind the Ethereum blockchain.

ETH went down-down-down.

In the past 48 hours, ETH is down by 15%.

In the hours after the Merge, ETH fell by 11%.

Like WHAATT?

I thought The Merge was bullish for ETH? So why is it going down like the rating for Brahmāstra.

We did too. But traders had a different idea.

One of the reasons for this fall could be — short selling.

In the crypto markets, there’s a ton of trading on what’s called the — derivatives market. These are contracts that represent the price of actual cryptocurrencies, like BTC, ETH, etc.

The cool thing is, we can see which kinda derivatives contracts are trading at what price.

And in the days and hours before The Merge, traders were short-selling ETH.

Here is the funding rates for ETH in the lead-up to the MERGE. Notice how the funding rates dropped closer and closer to The Merge. 👀

Hold up, what are funding rates:

When the funding rate is:

➕ = the price of the derivative is higher than the price of the actual crypto 🤝 less short sellers

➖ = the price of the derivative is lower than the price of the actual crypto 🤝 more short sellers

In this case ☝️ there was a hella number of short sellers immediately before The Merge. 👀

And even after the Merge we’re seeing some MAD bearish activity.

• Over 450k ETH moved from yield-generating platforms to exchanges

• Over 370k ETH moved from unknown wallets to exchanges

• Over 280k ETH moved from private wallets to exchanges

If you add this up, it’s $1.6 billion or Rs 12,700 crore. 🤯

Ah damn, is the Merge going to cause a Sub-Merge in ETH prices? 👀

Milky Meme Of The Day

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That’s all for today bhaiyo aur bheno! Naale Sigona!

Aakash "Dahi Cheeni" Athawasya & Arvind "Doodh Peda" Krishna

Yo! Our legal and financial advisors (aka our good ol’ conscience) have asked us to add this boring disclaimer.

None of what you read here is financial advice. We aren’t here to get you to buy or sell a crypto. We’re only here to tell you what’s up in crypto today and make you laugh. So, if you screwed up on a trade, that’s on you G. Stay safe in the markets.