Subscribe
By subscribing you agree to with our Privacy Policy and provide consent to receive updates from our company.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

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.
© Priority Crypto 2024

As the Ethereum Merge approaches, investors and traders have three potential strategies to consider. Let’s take a closer look at them.

Strategy 1: Holding Ether for PoW Tokens

The first strategy is straightforward: purchase Ether (ETH) on the spot market and hold it in an exchange wallet or any other wallet or platform that supports forked tokens, then wait for the potential Proof of Work (PoW) token. Traders can also keep their ETH in wallets that support forked tokens to receive an equivalent quantity of PoW tokens from entities that refuse to join the Merge. If PoW tokens become available, exchanges that support hard forks may be the best place to sell them.

It’s important to note that the ETH PoW tokens may not immediately experience a pump-and-dump cycle. Many analysts have expressed concerns about the centralisation of a Proof of Stake (PoS) Ethereum network. While it may seem unlikely, a miner-driven PoW ETH fork could gain traction if projects and developers are willing to build decentralised applications (DApps) on that blockchain. If you're feeling nervous about Ethereum's success with the Merge, you're not alone.

Given the volatile nature of the market, it's natural to be cautious about a fundamental change in the second-largest asset by market cap. A balanced approach, such as holding 50% in ETH and 50% in other assets, might be wise for those uncertain about the market's future.

Strategy 2: Hedging with Ether Futures or Options

The second strategy involves acquiring long Ether futures or options contracts. This approach allows investors to hedge against sharp downturns in ETH's price while still holding out for potential PoW hard fork tokens, which could offset losses on their spot positions. For those concerned about the risks of the Merge, this strategy offers a way to mitigate potential losses while still benefiting from the possibility of receiving PoW tokens.

Strategy 3: Staying in Stablecoins and Trading the Trend

The third strategy is to stay in stablecoins and trade the trend. Some investors may prefer not to engage with the Merge for the sake of potential rewards, and the 'free' PoW hard fork tokens might not be a priority. These investors may choose to hold stablecoins or follow the strongest trends in Ether, trading daily to capitalise on market movements. As the price is expected to experience significant volatility post-Merge, these traders could then purchase ETH after a potential dip. If the various PoW tokens gain high volumes on exchanges, price swings in these hard fork tokens could also present trading opportunities.

Conclusion

The Ethereum Merge presents both opportunities and risks, and the best strategy depends on an individual’s risk tolerance, market outlook, and investment goals. Whether you choose to hold ETH for PoW tokens, hedge with futures or options, or stay in stablecoins and trade the trend, it’s essential to carefully consider your approach.

January 11, 2023
UK Crypto Crackdown: Firms to Report Every Transaction by 2026
May 19, 2025

From 2026, UK crypto firms must report all customer transactions to HMRC under new regulations. Discover what this means for businesses, compliance professionals, and the future of Web3 in the UK.

Read more
How AI Interviewers Are Transforming Web3 Recruitment
May 16, 2025

Explore how AI interviewers are changing the hiring process in Web3 and crypto recruitment. Learn the benefits, challenges, and how to strike the right balance.

Read more
The Crypto Industry Needs Clarity on Staking – Here's Why It Matters for Talent and Innovation
May 1, 2025

The Crypto Council for Innovation is urging the SEC to clarify its stance on staking—and the ripple effects could impact Web3 hiring worldwide.

Read more