(Bloomberg) — Ether fell to a seven-week low and a bonus token awarded to holders of the digital asset tumbled as crypto investors turned their attention to the broader selloff in riskier assets.
Ether, the native currency of the Ethereum blockchain, has fallen for five straight sessions, falling as much as 6.5% to $1,407 on Friday, its lowest since July 27. It largely held those losses on Saturday. The network’s transition to a more energy-efficient method of handling transactions known as the merge has captured the focus of investors for weeks.
“This is likely due to a worsening macro backdrop 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 merger was a ‘sell-the-news’ event despite the upgrade’s positive long-term impacts.”
Bitcoin rose about 0.6% to $19,861 at 1:20 p.m. in Singapore on Saturday. The largest cryptocurrency by market value fell about 7.3% in the week ending Friday, compared with a 16% slide in Ether.
“With the merger ultimately a non-event and overarching macro headwinds still playing out, traders have been unwinding their ETH positions and turning back to Bitcoin,” said Jason Lau, San Francisco-based COO of the Okcoin exchange , said.
The additional cryptocurrency token that investors received after the merger has tumbled since late Thursday.
EthereumPOW, as the offshoot is known, represents many of the legacy computing operations of the blockchain that chose not to participate in the software upgrade. Ethereum has moved from a so-called proof-of-work system to a proof-of-stake method to secure 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 exchanges such as FTX before Ether holders received the token. It was trading at around $10.59 on Saturday.
“Now that the merger has been (very successfully) completed, we’ve run out of short-term positive catalysts and are running into a wall of bearish macro sentiment,” said Henry Elder, head of decentralized finance at Wave Financial.