One of the most popular selling points for the merge is what Ethereans (is that even a word? If not, consider it trademarked now) are calling the “triple halving.” This phenomenon describes the 80-90% drop in Ethereum’s supply issuance post-merge. The name takes after Bitcoin’s halving, which happens once roughly every 4 years, reducing the supply by 50%. Thanks to the merge, Ethereum is about to effectively undergo 3 of these events at once.
Under the proof-of-work consensus method, roughly 5.5 million ETH are issued per year. According to Ultra Sound Money
, issuance will be around .6 million Ethereum a year after the merge. That’s a difference of 4.9 million Ethereum.
This is where things get interesting.
We all know that Saylor is a big whale. Like Moby Dick big. He has spent in the ballpark of $4 billion to acquire his 129,699 Bitcoins. When Saylor started buying Bitcoin, his moves were large enough to track and to move the market.
Let’s pretend that the merge was not happening. What would it take to buy 4.9 million Ethereum at a current price of $1,700?
$1,700 X 4.9 million = $8,330,000,000 (that’s $8.3 billion). This is more than twice what Micael Saylor has spent to acquire his entire Bitcoin position. As @korpi87 points out, “the Merge at current ETH price is equivalent of two Saylor-sized ETH buys every year.“ And as the price of Ethereum rises, that $8.3 billion figure increases, meaning more Saylor-sized buys would be required to keep up. This is how the merge affects price. It’s built in and happens automatically.
With a little bit of math, Ethereum at a price of $3,500 requires 4.2 Saylor buys, and at $5,000, 6 Saylor buys are necessary. “Many Saylor-sized ETH buys would be needed to reproduce such supply growth reduction in PoW era.”
The halving has never been (for Bitcoin at least) a significant price trigger on the actual day of the event. The effects are felt over the following months/years as supply is reduced and price is driven up by consistent or increasing demand. The merge signifies more than just a triple halving, but this is a compelling long term argument. Over time, it will be like Saylor is buying massive amounts of ETH.
To be clear, Saylor is highly unlikely to buy massive amounts of ETH!