(Bloomberg) — Ether dropped to a seven-week low and a bonus token awarded to holders of the digital asset tumbled as crypto investors turned their attention back to the broader selloff in riskier assets.
Ether, the native currency of the Ethereum blockchain, fell for five straight sessions, dropping as much as 6.5% to $1,407 on Friday to the lowest since July 27. It was largely holding those losses on Saturday. The transition of the network to a more energy-efficient method of handling transactions known as the Merge had captured the focus of investors for weeks.
“It’s likely due to a worsening macro backdrop that is causing a decline in value of all risk assets in general,” Christine Kim, a research associate at Galaxy Digital, wrote on Twitter. “There was a widespread view among traders that the Merge was a ‘sell-the-news’ event despite the upgrade’s long-term positive impacts.”
Bitcoin was up about 0.6% to $19,861 as of 1:20 pm in Singapore on Saturday. The largest cryptocurrency by market value slumped around 7.3% in the week ended Friday, compared with a 16% slide in Ether.
“With the Merge ending up mostly a non-event and overarching macro headwinds still at play, traders unwound their ETH positions and rotated back into Bitcoin,” said Jason Lau, the San Francisco-based chief operating officer of the Okcoin exchange.
The additional cryptocurrency token that investors received after the Merge tumbled since late Thursday.
EthereumPOW, as the offshoot is known, represents much of the legacy computing operations of the blockchain that chose not to participate in the software upgrade. Ethereum moved from a so-called proof-of-work system to a proof-of-stake method for securing the network.
The new cryptocurrency rose to a price of as much as $60.68 on Thursday, according to data from CoinMarketCap.com that reflects the value of IOUs on some exchanges, and was on bourses such as FTX before Ether holders received the token. It was trading at about $10.59 on Saturday.
“Now that the Merge has (very successfully) concluded, we’ve run out of near-term positive catalysts and we’re running into a wall of bearish macro sentiment,” said Henry Elder, head of decentralized finance at Wave Financial.