Blockchain Ethereum’s long-awaited transformation from proof-of-work (PoW) to proof-of-stake (PoS) is expected to take place from September 15 to September 16, with traders and analysts anticipating results for the possible trading strategies, as reported by Cointelegraph.
According to Cointelegraph, traders can make Ether (ETH) in the spot market to hold it in their exchange wallet, or any platform which will support the forked tokens. In 2017, when Bitcoin was forked to Bitcoin Cash (BTC), BTC users received the same amount of BCH, which went for $1,650 per token. In 2021’s bull market, BCH’s value went as high as $800. If PoW tokens from those platforms choose to ignore the Merge takes place, then exchanges which support hard forks would be the place to sell them. Several analysts have talked about the risk of centralisation to a PoS Ethereum network, under the assumption of projects and developers intention to create decentralised applications (dApps) on blockchain.
Moreover, Cointelegraph reported that hedging should be an option for those who feel 50/50 about the Merge. Through long Ether, one can have the option to hold short positions in futures or options contracts provide protection against losses if ETH is able to obtain PoW hard fork tokens, to remove losses from the spot position. For certain investors, risks of attempting to trade the Merge outweighs the reward and gets the PoW hardfork tokens might not be necessary. Investors should consider of keeping themselves with stablecoins and trading direction. In this situation, one could either trade on a daily basis or go by the short-term trends. Many traders are of the believe that the Merge will be a rumour kind, sell the news type event, as people expect the price to fall after the Merge happens.
Cointelegraph stated that creation and execution of a strategy around the anticipated volatility is relatively possible, for traders to purchase if they expect ETH to fall post the merge.
(With insights from Cointelegraph)