Soaring from the bottom area of around $900 to a top divergence of $2,000, the rise of Ethereum has made many investors cry over their decision, which is waiting for $500 to buy the dip. The bounce-back is inseparable from the rumors of Ethereum merge and upgrading. As the merge approaches, the market is holding its breath to wait for the final result.
What exactly is an Ethereum merge? Why does an Ethereum merge have such a big impact? What impact will an Ethereum merge have on retail investors? How to participate in the raving trend of Ethereum merge and forks?
In response to everyone’s questions, we launched the workshop “BitKeep Spotlight: Ethereum Merge and Forks”, through which we can answer your questions and help you catch more market opportunities.
Last week, we released our first article “Explained: What do the Ethereum Merge and Forks Entail?“. This article will be the second one for this series. We hope to answer the most concerned questions of individual investors, like what are the implications of Ethereum merge and forks; how to seize investment/speculative opportunities, and what risks should be noted and guarded against.
Please be advised that this article is for informational purposes only and should not be construed as any investment advice.
1.Profit from fork coins airdrop
Since the date of Ethereum merge has gradually become clear, there have been voices of Ethereum forks besides wild guesses of the community’s support towards the Ethereum merge. In the previous article, we also mentioned that Ethereum is about to merge and turn into a brand-new mechanism, and Ethereum miners can no longer make much profit, so the relevant interest groups choose to stick to the Ethereum PoW chain. Due to the fact that there are different interest groups, there may be multiple forked chains.
For individual investors, Ethereum fork may not be a bad thing. After all, there will be candy airdrop (fork coins) from the forked chain. Moreover, claiming fork coins should be considered as an investment with very low cost and risk.
On August 17, BitKeep stated that it will support access to the Ethereum forked chain, and will also launch new product functions that are convenient for users to receive and trade fork coins. For users who want to claim an airdrop of fork coins, download and install (https://bitkeep.com/), then transfer ETH or other ERC20 assets to the Ethereum main chain in advance, and then wait for the new function to be launched.
2.ETH spot trading
In addition to the airdrop of fork coins, spot trading investment might also be a good idea. In recent months, the price of Ethereum has climbed from a dip of around $900 to $2,000, and the release of the good news of the merge has certainly contributed to it. The merge and upgrade of Ethereum is a major event in the history of the blockchain world and will have a great impact on the Ethereum ecosystem and token economy.
For speculators, they have already bet on spot trading. The early rise of ETH was correlated to optimistic market sentiment around the upcoming Ethereum merge, which encouraged many retail players to adopt spot trading strategies. However, there might be more concerns about the sharp drop in ETH inflation and possible deflation after the Ethereum merge and transformation towards PoS.
Aside from ETH spot trading, a heated market of ETC investment can’t be ignored. After all, ETC might be the best choice to undertake the computational power of miners.
The merge and upgrade of Ethereum is simply a shift to the PoS consensus mechanism. The needs for miners and their computational power are eliminated and replaced by nodes pledged for network maintenance. This also promotes the field of Staking to attract market attention, and the stunning performance of LDO and SSV (SSV Network) in the secondary market well confirms this.
As the Ethereum merge enters the countdown, the importance of Staking will become more prominent, and those who pay continuous attention to relevant chances may gain lots of profits.
4.Loans and hedging strategy
As mentioned above, users with ETH can make profits by claiming fork coins. However, is ETH spot trading the only choice for fork coins?
Seasoned investors have staked ETH via centralized and decentralized lending markets. For example, some users holding USDT can lend ETH by staking their own tokens. ETH will be transferred to the Ethereum main chain so as to wait for fork coins airdrop.
Of course, there are also veteran players who establish short positions in contract trading while buying spot ETH to hedge against the volatility brought about by the market.
Of course, this strategy requires higher trading skills for investors and there is also great uncertainty.
5.Opportunities and risks
Opportunities and risks often come together, and users who want to invest or speculate in the Ethereum merge and forks should also be aware of potential risks.
As the saying goes: buy the rumor, sell the fact. Although the price has doubled from the dip of $900, we have to admit that it is still a bearish market. The economic condition is worsening, and trading activities on the Ethereum chain are quite deserted. Given the Ethereum merge is a rare hotspot in the current bearish market, there will be potential selling pressure when the merge is completed.
In addition, various security breaches are constantly posing threats to the safety of users’ assets. With the approaching of the Ethereum merge and the emergence of forked chains, users need to keep their eyes sharp and be aware of potential scams.
In general, the Ethereum merge is a milestone in the industry. Whether it is to seize investment opportunities or to catch up with industry trends, you are more than welcome to follow our special edition “Ethereum Merge and Forks”. There will be more relevant information released in the future and there will also be a more detailed tutorial on “claiming fork coins”.