It’s been a little more than a week since Ethereum completed its big technology transition to proof-of-stake – an event that has been hailed as one of the greatest technological feats in crypto history and celebrated all week by the crypto community – and yet the price of ether is still falling. The cryptocurrency has lost 19.3% since the merge was completed on Sept. 15, according to Coin Metrics. For the week, it’s down about 10%. Twice during the week, as bitcoin dipped below the $19,000 level, ether hovered at $1,300 (about 70% below its all-time high). Many expected the merge to be a buy-the-rumor/sell-the-news event, and there are growing concerns in the crypto community about the post-merge Ethereum. However, the continued drop is largely thanks to forces outside of network developments, namely, the broad sell-off in risk assets after the Federal Reserve’s recommitment this week to aggressively increasing interest rates . On Friday, the Dow Jones Industrial Average found a new intraday low for the year, while the S & P 500 headed to a new closing bear market low. Traders unwinding big short positions in derivative exchanges added to selling pressure this week, according to Crypto Quant. Ahead of the merge, many investors were buying spot ether and shorting ether perpetual futures , in order to get tokens of the “forked” version of Ethereum for free, without the ether price exposure. Growing concerns Ahead of the merge, there were two main concerns the crypto community had begun exploring. The first is the possibility that the new, “forked” Ethereum network could take off as proof-of-work miners in search of a new home served that new chain, called Ethereum PoW (ETHW). While this is technically possible, practically speaking, few see it as a real threat to Ethereum. Traders used this new chain for the post-merge arbitrage opportunity – a bonus ETHW token was awarded to existing owners of ETH and many had anticipated a quick selling opportunity following Ethereum’s tech transition. Another forked version of Ethereum, called Ethereum Classic, was created in 2016 and effectively operates as a zombie chain today, but has seen a spike in activity following the merge. “It looks like Ethereum Classic has been the main beneficiary post merge,” JPMorgan’s Nikolaos Panigirtzoglou said in a note this week. “The hashrate of Ethereum Classic has increased to twice its level before the merge… It would be interesting to see how these PoW chains would absorb the large flock of Ethereum miners as the excessive increase in the hashrate is reducing miners’ profitability.” A potentially bigger concern has to do with centralization, one of the core tenets of cryptocurrency. Panigirtzoglou noted that only “a few entities command the majority share of staked ETH.” Lido is the largest staker of ether today, followed by Coinbase. Kraken, Binance and Staked.US, in that order, have the next largest share of staked ether. The fear is that this handful of validators could effectively decide the fate of the network. Before, when Ethereum used proof-of-work, an entity would have needed to amass 51% of the power (or hashrate in the old system) to be able to censor others in the network and control the blockchain. Now, in Ethereum’s new proof-of-stake existence, that threshold is about 33%. And those five main validators exceed that amount, according to Michael Rinko, venture associate at AscendEx. “The philosophical fear is that as regulators become more hands on and probably hawkish towards crypto, they’re going to increasingly lean and exert influence on those companies and essentially influence how they validate transactions and interact with the blockchain. As of right now, it’s philosophical, but at some point it will become a more real issue,” Rinko said.