As inflation is still at a very high level in the United States and in most developed countries, the Fed has been aggressively increasing its key interest rates to tumble inflation, which is weighing on global growth prospects, as recession risks are intensifying. This situation is negatively impacting traditional markets, as well as the cryptocurrency market.

Some crypto-investors might be wondering if it is time to buy Ethereum to take advantage of its lower prices and growth potential over time. Others might be ready to take advantage of all market opportunities with short-term trades through regulated and safe brokers like easymarkets. Regardless of how you want to take advantage of Ethereum, lets take a close look at the reasons why prices have gone down and if it is worth investing in the ETH token.

Why have ETH prices gone down so much?

Prices of Ethereum have gone up since the bottom reached July, mostly in anticipation of the big event. But when The Merge was over, investors wanted to secure some of their gains, which has pushed the price of the token down since the event. But that's not the only reason for the drop. The cryptocurrency market is indeed increasingly correlated to the traditional markets, which means that it is often impacted by economic news, such as inflation figures and monetary policy decisions from major countries.

The Federal Reserve begins its two-day monetary policy meeting today and further decisions are expected this week from the Bank of England, the Bank of Japan, and the Swiss central bank. This is why investors are somewhat wary of investing in such risky assets as cryptocurrencies right now, as lower purchasing power and tightening conditions around the globe are weighing on the market sentiment.

We should also not forget the intervention of the Chair of the U.S. Securities and Exchange Commission, Gary Gensler, who indicated last week that cryptocurrencies using the proof-of-stake model could be classified as securities. This would mean that the regulators would have the right to look over these tokens, which now includes Ether, and that rules could regulate investment in such assets.

How will The Merge help Ethereum grow over time?

One of the most common criticisms of cryptocurrencies is that they are energy intensive.

The blockchain following a proof-of-work transaction validation consensus relies on miners”, who must solve a complex mathematical problem as quickly as possible to be the one chosen to add a block to the blockchain and reap the rewards.

To solve these mathematical puzzles, miners must use the computation power of the hardware they own, which runs on electricity. The more power the mining hardware has, the faster it is and the more likely it is to solve the mathematical problem quickly and earn rewards. But this also means that it consumes more energy.

Such blockchains also require more time to identify, validate and add a block to the blockchain. This means that the number of transactions processed per second is somewhat limited. To address the scalability issues of its blockchain, Ethereum has therefore decided to move from a proof-of-work blockchain to a proof-of-stake blockchain. Thus, its network will be much less energy intensive, much faster, and potentially less expensive in the long run.

Let's not forget Ethereum is also one of the most popular and widely used cryptocurrencies in the world of decentralized applications, NFT, and the metaverse. So the token's growth potential is important, as The Merge should help the blockchain attract more users in future key domains of the cryptocurrency markets.

So, is it time to buy Ethereum?

Only you can answer this question, depending on your strategy, your financial goals, your capital, and your time horizon. Even though the cryptocurrency market is a volatile market, it is also full of opportunities you can exploit, over the short or long term. But always remember to follow your trading plan and stick to your money management rules.