Consensus hot topics: ETH merge and Fed pivot

Last week a few of us from the HIVE team attended Consensus 2022, one of the largest Ethereum conferences in the world. This year 20,000 crypto enthusiasts and industry members attended in steamy Austin, Texas.

It was hot, with temperatures reaching around 105 degrees. But with markets crashing, the atmosphere in the convention center felt a bit chilly.

The timing of the conference was interesting, to say the least. On top of approaching Federal Reserve interest rate hikes, crypto markets had just digested the $50B collapse of the LUNA “stablecoin staking” network. Coins were crashing, and we were about to get another surprise with the failure of Celsius, a “CeFi” (centralized finance) digital asset lending and trading platform.

The mood was somber, which likely led to a more productive conference. Frank discussions were had about the future of CeFi and DeFi, the merge to proof-of-stake, lending, and other aspects of the ETH ecosystem.

There was good news too, especially regarding ETH’s layer-2 scaling solutions. A number of layer 2s are providing cheap and reliable ETH transactions at a small fraction of the price of a transaction on the main blockchain (via

We spoke with many HIVE shareholders during the conference. It was truly a pleasure to meet some of you in person. We had productive and fun discussions, despite rocky market conditions (more on that below).

Overall, it was a great conference. Two of my primary takeaways from Consensus were:

  1. ETH merge is likely farther away than most expect
  2. Everyone is waiting for the Fed pivot

Let’s briefly go through each.

ETH Merge (Hot Topic)

HIVE had a booth this year, which provided a great way to connect with investors, analysts, and potential partners.

The most common questions we fielded were “What will HIVE do after the ETH merge?”, and “What do you think about the timing of the merge?”

The latter question about merge timing was often asked in hushed tones, as if we were discussing something crass. By the end of day one, I had my response down pat.

“HIVE has been mining ETH for about 5 years now. For most of that time the merge has been 6 months away. We expect further delays, but have been preparing for the possibility over the past few years.

Mining Ethereum with limited competition gave us the cash flow to dramatically ramp-up Bitcoin mining, which now makes up a substantial majority of our revenue.

If Ethereum PoS is successfully deployed, we expect it to be at a substantially later date. It’s an incredibly complex operation with a billion moving parts.

We wish the team working on ETH PoS the best of luck. Ethereum is an important project and a successful merge could save a lot of energy.”

True merge believers would dismiss this view and argue that since the Ropsten PoS testnet was successful, activating the merge is essentially “just flipping switches from here”. According to multiple technical members of the HIVE team I spoke with, the operation is not so simple, and there are still many roadblocks.

Time will tell.

Waiting on the Fed

Almost everyone I spoke with at Consensus are concerned about the impact of Fed rate hikes in the short-term. But a high percentage believe (as I do) that eventually the Fed will “pivot” (reverse course) and start easing.

The big question, of course, is when such a pivot might occur. For now, the Fed seems determined to knock asset prices lower to tame inflation. Nobody has clear answers to these questions, but it was widely discussed regardless. Broader macro concerns are clearly weighing heavily on the market.

There was some talk over whether Bitcoin, and possibly Ethereum, could decouple from altcoins after a hypothetical Fed pivot. The theory being that BTC, and possibly ETH, are viewed as inflation hedges and could see increased demand. Personally, I think this theory has merit, especially with Bitcoin. But again, only time will tell.

Next week, we’ll tackle regulatory issues, and how they are likely to increase in the near future due to the failure of projects such as Celsius and Luna, and the resulting fallout to retail and institutional investors. This was also a very hot topic at Consensus, and likely will continue to be one over the next few years.

Hodling strong,

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