Ethereum Merge nears final countdown as bitcoin and ether inch higher

• Ethereum's long-awaited merge event is set to happen around Wednesday or Thursday, the Ethereum Foundation said.
• It will entail switching the blockchain from proof-of-work to proof-of-stake, and is meant to dramatically reduce energy use.

Ethereum's merge event is set to happen around Wednesday or Thursday, according to the Ethereum Foundation.

After selling off roughly 10% on Tuesday following the August inflation data, prices for the two biggest cryptocurrencies by market cap inched higher. Bitcoin gained roughly 0.64% Wednesday to trade at $20,271.80, and ether climbed 1.76% to $1,602.38.

The update to the ethereum blockchain has been six years in the making, and experts say it could slash energy consumption by 99%. Ethereum co-founder Vitalik Buterin has said that the goal would be to cut energy by 99.5%.

The merge will transform Ethereum from a proof-of-work to a proof-of-stake consensus mechanism, which means gas fees, or the cost per transaction, will come down, and the network will be able to process more transactions in a shorter amount of time.

"The way to think about the merge is simply as a shift in the way transactions are validated on Ethereum," Ari Redbord, head of legal and government affairs at TRM, told Insider on Monday.

Some commentators have called the merge the most important occurrence in crypto history, just behind the invention of bitcoin and ether. Ethereum is used in some of the most popular Web3 and digital asset projects like gaming, NFTs, and smart contracts.

Meanwhile, Bank of America analysts wrote in a note last week that the merge could usher in more institutional adoption. In their view, larger firms that may have once been barred from buying into proof-of-work blockchains could now get involved with ethereum.