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Investor trade strategies for the upcoming Ethereum Merge

Traders and analysts have been debating the outcomes of Ethereum’s upcoming transition from proof-of-work to proof-of-stake since September 15, 2019. There are three potential strategies for investors and traders can opt for, let’s take a look at them.

The first strategy is straightforward. Just purchase Ether (ETH) on the spot market and hold it in their exchange wallet, or in any other wallet or platform that supports forked tokens and wait for the PoW token.

Traders can keep their BTC in their wallets or any other wallet that supports forked tokens in order to receive an equal quantity of BCH. If PoW tokens from those entities that refuse to join the merge are available, exchanges that support hard forks would be the best place to sell them.

The ETH PoW tokens may not immediately pump and dump right away. Many analysts have voiced their concerns about the centralisation of a PoS Ethereum network, and while it may sound far-fetched, a miner-driven PoW ETH fork could gain ground if projects and developers are willing to build DApps on the blockchain. If you're a bit nervous about Ethereum's success with the Merge, you're not alone.

Bitcoin (BTC) lost all of its yearly gains this year, Wonderland Money went bankrupt, and Terra (LUNA) got everyone rugged, so it's perfectly natural to be cautious about a fundamental change in the market's second largest asset. A 50/50 balance is the option for those who are uncertain about the future of the market. To exhibit this, one would be long Ether, which many holders naturally are and have been for years, or at least from the recent $880 “bottom.

The second strategy is by acquiring long Ether futures or options contracts, one can protect against ETH's sharp downturns and hope to receive PoW hardfork tokens, which should offset losses on the spot position. The belief that they may earn some of their lost money back from the unconfirmed PoW tokens may help skittish Merge traders sleep better at night and hopefully end up profitable.

On the other hand, the third strategy involves staying in stablecoins and just trading the trend. Some investors, however, are reluctant to trade the merge for the sake of the reward, and the 'free' PoW hardfork tokens might not be a priority. These investors might instead select stablecoins or the strongest trend in Ether, either of which would be traded daily. As a result, the price is expected to drop significantly after the Merge is completed.

It is comparatively easy to craft and implement a strategy around this anticipated volatility if one is sitting comfortably. These traders might then purchase post-dip ETH if they are true believers and if the various PoW tokens put up high volumes on exchanges, the price swings in hardfork tokens may also be played.

What do you think is the best strategy for traders, investors, and enthusiasts to opt for the Ethereum merge? Do you think another strategy would be more effective and cater to the majority's holders' needs? Leave your comments below.

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