Ethereum, the second-largest cryptocurrency by market cap, has been making headlines with its ongoing transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism, known as the Ethereum 2.0 upgrade. This major change also referred to as “The Merge,” is expected to significantly impact the Ethereum ecosystem and its native token, Ether (ETH).
In this guide, we will explore Ethereum price predictions and discuss various factors that may influence ETH’s price post-merge. Additionally, we’ll provide insights on how to trade ETH effectively and capitalize on potential market opportunities during this transformative period. Stay tuned to learn more about Ethereum’s future and how to make the most of your ETH investments.
What Is the Ethereum Merge?
The Ethereum merge is a planned change to the Ethereum blockchain that will result in two separate chains: Ethereum Classic and Ethereum. The date of this event has not yet been announced, but it’s expected sometime this year (2019).
The Ethereum Merge is the process of joining Ethereum’s Proof-of-Stake (PoS) Beacon Chain with the Ethereum Mainnet, transitioning the Ethereum blockchain from the legacy Proof-of-Work (PoW) consensus mechanism to the PoS consensus mechanism.
This significant update aims to make Ethereum more energy-efficient and scalable. The Merge was executed on September 15, 2022, completing Ethereum’s transition to PoS consensus and reducing energy consumption by approximately 99.95%.
The Merge does not directly affect the availability or functionality of ETH trading pairs on various cryptocurrency exchanges such as ETH USDT. ETH will continue to be traded against other cryptocurrencies and fiat currencies as it was before the Merge.
Why Was Everyone Excited About the Ethereum Merge?
The Ethereum merge is a major event in the cryptocurrency world. The reason why people are so excited about it is because Ethereum has been around since 2015 and has been gaining popularity ever since. It’s currently the second largest cryptocurrency by market cap, behind only Bitcoin.
Ethereum also has a lot of potential for growth in the future–it could even overtake Bitcoin as number one someday. In fact, there are already rumors that some people are planning to sell their ETH holdings once they get access to their newly-merged coins after the fork happens on January 14th.
Ethereum Post-Merge Upgrades
After the Ethereum Merge, several upgrades and improvements are expected to take place to enhance the Ethereum network’s scalability and security. Some of these post-merge upgrades include the Surge, the Verge, the Purge, and the Splurge.
After the Ethereum Merge, the network transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism. As a result, the traditional Ethereum mining pool became obsolete, since PoS does not rely on mining for validating transactions and securing the network.
Post Ethereum Merge Price Prediction: 3 Potential Outcomes
As the Ethereum hard fork approaches, there are three potential outcomes for the price of ETH. (1:1).
Bullish Post-Merge Ethereum Price Prediction
The first is a bullish post-merge Ethereum price prediction, where the market responds favorably to the new coin and pushes up its value. This would be great news for those who hold large amounts of ether, as they will be rewarded with free coins from this fork.
Optimal ETH Option Strategy: Bull Call Spread
The Bull Call Spread is a simple strategy that can help you make money when the price of Ethereum goes up. The way it works is by buying call options, and then selling another set of calls at a higher strike price.
The maximum profit on this trade will be equal to the difference between the two strikes (in most cases). If ETH prices go down instead of up, then your losses are limited because only one set of contracts expires in the money while the other expires out-of-the-money (meaning they expire worthless).
Bearish Post-Merge Ethereum Price Prediction
The post-merge Ethereum price prediction is bearish. The main reason for this is because the market will be flooded with ETC and ETH. This will lead to increased supply and decreased demand, which results in a drop in prices for both currencies.
The price of ETH could also fall as a result of the merge itself. If any bugs or issues arise during the process, it could cause panic among investors who may sell their tokens as fast as possible as they fear losing money from their investment due to these problems being fixed later on.
Optimal ETH Option Strategy: Bear Put Spread
The best strategy for ETH traders is to buy one put option at a strike price of $0.30 and sell two put options at a strike price of $0.20.
This strategy is called the bear put spread because you’re betting on the price of ETH decreasing over time, but only by a small amount–so there’s no need to wait until expiration day! As long as you follow these steps, this trade will always make money:
Neutral Post-Merge Ethereum Price Prediction
In the post-merge scenario, the price of ETH will remain neutral and unchanged. There will be no volatility in the prices of ETH as the merger has no impact on its underlying fundamentals.
The fact that there is no change in the value of a cryptocurrency means that it’s being traded at its intrinsic value or market price. In this case, we mean by intrinsic value what one would expect someone buying an asset today to receive tomorrow minus any transaction costs associated with buying and selling (e.g., commissions).
Optimal ETH Option Strategy: Cash-and-Carry Arbitrage Trade
Cash-and-carry arbitrage is a trading strategy that involves buying an asset in one market and simultaneously selling it in another market for a profit. The key to this strategy is finding an opportunity where the price of an asset differs between two different exchanges, allowing you to buy low and sell high (or vice versa).
What to do with ETH after the merge?
After the Ethereum Merge, ETH holders have several options to consider for managing their assets:
Staking: With the transition to Proof-of-Stake, ETH holders can stake their tokens to earn rewards. Staking yields on Ethereum’s Beacon Chain are estimated to rise to 9-12% APR after the merger, considering net transaction fees.
Trading: ETH holders can continue trading ETH on various cryptocurrency exchanges, capitalizing on market opportunities and price fluctuations.
Holding: Investors can hold onto their ETH, anticipating potential future price appreciation due to the network’s increased efficiency and scalability after the merge.
Airdrops: In the event of a successful post-merge PoW fork, ETH holders may receive additional tokens, such as ETHW, at a 1:1 ratio for the amount of ether they held prior to the fork. Make sure to keep your ETH in a wallet that supports the airdrop to take advantage of this opportunity.
Participating in DeFi: ETH holders can also participate in various decentralized finance (DeFi) platforms, providing liquidity, borrowing, lending, or using ETH as collateral for loans.
Conclusion
The Ethereum merge was one of the most anticipated events in cryptocurrency history, and it didn’t disappoint. The resulting price action was exciting, but it’s important to remember that we’re still in the early stages of this new digital asset.
As such, there will be many more opportunities for traders who want to make money from their knowledge about what’s happening on the market–and how they can use options trading strategies like cash-and-carry arbitrage or bull call spreads to do so.
