James GordanThe long-awaited Ethereum merge is finally happening! And as an investor, you might be wondering how to take advantage of this event best. The Ethereum this software network will finally switch from proof-of-work to proof-of-stake between September 15 and 16. Here are three strategies that could help you make the most out of the upcoming ETH merge:
1. Get in early and buy up as much ETH as you can. The price is bound to go up as demand for the currency increases.
2. Sell your ETH before the merge happens. Some people may be nervous about the merge
Keep Your Ether so that After a “Hard Fork, “You Can Get the Token You Want
Investors in Ethereum are facing a dilemma. Ethereum, the world’s second-largest cryptocurrency by market value, is in the midst of a major upgrade that could result in a so-called hard fork. A hard fork occurs when a cryptocurrency’s existing code is changed in a manner that is not compatible with the old code, effectively creating two separate versions of the currency. If enough users adopt the new version of the software, a hard fork can lead to the permanent split of a cryptocurrency into two different assets.
For Ethereum, this potential split has been brought about by disagreements over how to best scale the network to accommodate increasing transaction volumes. The proposed upgrade, known as Constantinople, would implement a number of changes to Ethereum’s code that would make it more efficient. But a key component of Constantinople, known as EIP 1234, would delay the implementation of another change known as the “difficulty bomb.” This delay would make it easier for miners to profit from mining ether in the short term but would ultimately lead to an increase in difficulty and a decrease in rewards over time.
A group of developers who oppose Constantinople has put forth an alternative proposal known as Constantinople Noetic. This proposal would keep the difficulty bomb intact and implement other changes that they believe would be more effective at scaling Ethereum. If both recommendations are adopted by users, then a hard fork will occur, and two separate versions of Ethereum will be created: ether (ETH), which will run on the Constantinople chain, and ether classic (ETC), which will run on the Noetic chain.
Investors who want to ensure they receive both tokens after the fork will need to keep their ether holdings in a wallet that supports both chains. Some exchanges have already stated that they will list both ETH and ETC after the fork, but investors should check with their businesses to confirm their plans. For those who want to take more control over their holdings, it may be necessary to move their ether into a personal wallet before the fork occurs. Once the separation happens, investors will then need to follow instructions from their chosen wallet provider on how to access their new ETH or ETC tokens.
Investors who want to trade either ETH or ETC should keep in mind that there is likely to be increased volatility around the time of the fork and afterward as markets adjust to the new reality of two competing Ethereum assets.
Plans to Buy or Sell Ether
Ethereum, the world’s second-largest cryptocurrency by market value, is set to go through a major change in mid-January 2020. The so-called “Ethereum merge” is a process of combining two existing blockchains into one. The goal is to upgrade the network in preparation for the next stage of its development, which will enable it to process more transactions per second and make other improvements.
For investors, the big question is whether to buy or sell ether ahead of the merger. Here are three possible strategies:
1. Sell ether now and buy it back after the merge. This strategy makes sense if you think the price of ether will go down in the short term as a result of the uncertainty surrounding the merger. By selling now and buying back after the union is complete, you can potentially lock in a lower price and avoid any potential losses if things don’t go as planned.
2. Hold onto your ether and wait to see what happens. This strategy makes sense if you think the price of ether will either go up or down as a result of the merger, but you’re not sure which way it will go. By holding onto your ether, you can participate in any price movement that might occur once the details of the merger are finalized and made public.
3. Buy more ether now in anticipation of a price increase after the merge. This strategy makes sense if you think the hype surrounding the Ethereum merge will lead to a buying frenzy that drives up prices in the short term. By buying more ether now, you can potentially profit from any resulting price increase.
Keep Your Money in Stablecoins and Watch How the Market Moves
Around mid-January 2020, Ethereum will go through a hard fork update, Constantinople. This update will change the mining algorithm to make it ASIC (Application-Specific Integrated Circuit) resistant. Currently, Vitalik Buterin and the Ethereum Foundation are working on a plan to merge two separate blockchains, Ethereum and Ethereum Classic. If you are an investor who wants to take advantage of the upcoming Ethereum merge, here are three strategies you can use:
1) Keep your money in stablecoins and watch how the market moves
2) Use a dollar-cost averaging approach
3) Buy assets that will benefit from the Constantinople update
Simon Leonard