Crypto: Ethereum passes final test run ahead of merge, BlackRock starts bitcoin trust

Crypto reporter David Hollerith breaks down ethereum's latest test run ahead of its merge, and BlackRock's motion to launch a private bitcoin trust in a partnership with Coinbase.

Video transcript

- Ethereum prices ticking higher again today as the cryptocurrency has jumped more than 70% just in the last month. Now this comes ahead of a highly anticipated merger for the Ethereum network, and here to explain more on that merge and the latest test being run is our very own Dave Hollerith. Dave.

DAVDI HOLLERITH: Yeah, so we've learned today from following a developer call between core programmers of the Ethereum blockchain that they've set a tentative date for what we can sort of call the full initiation of this massive software transition from proof of work to proof of stake, which the blockchain is undergoing. Now, it's known as The Merge, and it's been in the works for years. But now the team is slating the initiation for the last phase of this transition to September 15.

Now, with The Merge, Ethereum is sort of aiming to solve some of the key problems that blockchains face as far as getting use, namely around security, scalability, and environmental sustainability. In terms of the crypto market, this is huge. This is possibly the biggest event since the Bitcoin halving in 2020, which is sort of what initiated crypto's cycle.

Obviously, there were some macro factors that played a big role in what happened. But you know, crypto investors are getting more and more optimistic about this by the day. So by moving Ethereum from what we call proof of work to proof of stake, The Merge should cut Ethereum's energy consumption by about 90%.

And there's also a lot of talk about it drastically cutting the supply of Ether, its native cryptocurrency, in the months following the merge initiation. So as you pointed out, Rochelle, in the past month, Ether has jumped. It's on its way to doubling. And right now, it is at a $1,900 per coin or on that cusp. So we're sort of watching that to see what happens next and if anything around the merge is sort of changed last minute, which is totally possible in the weeks coming.

- Dave, I want to shift gears to Bitcoin because BlackRock furthering its dive into cryptocurrency with a new offering on that coin. What's the latest there?

DAVDI HOLLERITH: Yeah, it actually it kind of ties into the energy situation with Ether too in a way. So the $10 trillion asset managers has been showing signs of getting interested in the space for a while. It's been unclear about what they're doing.

But today, they announced that they're going to start a private Bitcoin trust. And that trust will be managed by-- or it will be managed by BlackRock, but it will be held in custody with Coinbase's Prime product. Now, Bitcoin rallied on the news, but it still hasn't been able to get above that $25,000 mark.

Coinbase's stock still appears to be lagging, probably based on the $1 billion loss that the company shared for its Q2 earnings earlier this week. But interestingly, BlackRock in its press release actually sort of addressed Bitcoin's high energy consumption, which critics also often point to. And it shouted out a much smaller non-profit which has a token-- Energy Web, EWT.

And that token has since plunged 32% on the news. So again, BlackRock is starting a private Bitcoin Trust. This isn't something like an ETF that retail investors can get involved in, but it's always great to see that institutional factor heading into the space.

- We'll be keeping an eye on that $25,000 mark for Bitcoin. Thank you as always. Dave Hollerith there reporting for us.