A top crypto fund shares the 3 risks associated with ethereum's upcoming merge — and explains why there isn't a definite date for the upgrade

One of the most significant software upgrades in the world this summer will be implemented by the ethereum network.

The proof-of-stake consensus will be used on the platform after an event called the merge.

Bitwise Asset Management, a top fund in the digital asset industry, believes that this upgrade is the most compelling story of the year.

The merge will allow stakeholders to earn more yield, reduce ethereum's energy consumption, and make native token ether more scarce. There are risks associated with the event.

Matt Hougan, chief investment officer at Bitwise, said in a webcast this week that the upgrade is a high-stakes, highly complex upgrade that protects more than $300 billion in assets.

The launch of the merge has gone through a number of delays, which could allow competitors to take up market share.

Tim Beiko said last week that the upgrade wouldn't happen in June, but in the months after.

Even further delays can be ruled out, according to Btiwise's Hougan.

He said that complex software launches are often delayed.

There is a chance of further delays, as proof of stake systems are more complex than proof of work systems.

Even though it would be well tested, the process might not be free of glitch.

He said that as you go through an upgrade in the transition, there is the chance of unintentional bugs or exploits being introduced into the ethereum blockchain.

Hougan said he has seen other blockchains fail when it comes to big upgrades. He said that the risk of that happening is not zero.

The proof-of-stake consensus mechanism is not as battle-tested as proof-of-work, which has proven to secure large networks for the last 12 years.

Proof of work has been around for more than a dozen years. It is a well-proven system, and it is periodically stored more than a trillion dollars.

He said that proof of stake is a newer system and has more inherent risk, and at least its security guarantees may be discounted slightly.

Despite a number of delays to the merge in the past, many enthusiasts are confident that the upgrade will take place in the next few months, but even the developers don't know when that might be.

If you ask an ethereum developer when the merge is coming, the most likely answer is when it is ready.

Ethereum has a number of test networks that are being merged. The tests were successful. There is a chance that the merger will happen in the third quarter. A delay to Q4 is possible.

The head of research at an $800 million asset manager breaks down how she does her research before she picks winning bets and shares 3 under-the-radar altcoins that she is bullish on.