Ethereum Merge is finally done after years of work. Ethereum Merge will have a huge impact on the crypto ecosystem. Despite its short history, crypto has a few major updates like Merge and ETHW hard fork. The successful completion of Merge is thought to affect the future of the crypto market.
What is Ethereum Merge and why is it important?
cryptocoin.com As we have reported, Merge is the planned multi-year transition of Ethereum. Ethereum’s goal is to move from proof-of-work (PoW) to proof-of-stake (PoS) and reduce the carbon footprint of Blockchain by 99.95 percent. The launch of the beacon chain in 2020 was the first step in this transition. Completion of the last shadow fork was the preliminary finale.
Miners and PoS proponents have announced a hard fork to keep the blockchain alive and for those who don’t want to switch to the PoS chain. Therefore, with the launch of the PoS chain, it is likely that the PoW chain will exist and continue to operate in parallel. However, Vitalik Buterin stated that he does not think this new hard fork will work. Merge represents the end of an era for Ethereum. All the efforts of the developers and team are focused on scalability and reducing transaction costs after migration.
The main Ethereum Blockchain, its resources, key partners and institutions will likely adopt the PoS version, further increasing the adoption of ETH. Ethereum’s migration journey begins with Merge. The move to proof-of-stake marks a halfway point in Ethereum’s journey. Developers next main goal is sharding. Sharding aims to improve scalability by dividing the Ethereum Blockchain into parallel segments.
Ethereum Merge: Risks and challenges
Industry experts, crypto advocates and influencers have evaluated the potential risks and challenges associated with Ethereum Merge. You can find these items below:
- Merge can trigger negative funding: There is a growing concern about negative funding among investors. In the spot markets, Ethereum traders will receive ETHPoW tokens. These tokens will be airdropped at no additional cost. It will be sold in open markets. It is said that as a result of these trading strategies, excessive open positions in perpetual and forward contracts will cause negative funding. Negative funding means traders are in a downtrend. The average funding rate on major exchanges has dropped to its most negative level ever. Holding an open position in Ethereum is more expensive than ever before in history.
- Minor errors may occur: With the current challenge, the hash rate, and the pressure on the successful completion of the merge, there is a possibility that there will be some minor glitches along the way. Proof-of-stake validators will take on the responsibility that miners have assumed since the launch of Ethereum. Therefore, glitches are likely to occur.
Trading strategies for Ethereum after Merge
The successful completion of Ethereum’s merger could act as a catalyst, fueling bullish sentiment among its holders. Traders holding “spot” Ethereum can benefit from the increase in Ethereum price. Traders keeping their Ethereum bags might consider shorting a small portion of their portfolio using futures contracts. Short-term losses experienced can be adjusted according to the small percentage of assets in the portfolio. If Ethereum price goes up after the merge, you could lose your assets. However, glitches during Merge can fuel a dump. Investors can lose their holdings, so your position turns into a profitable one.
$22 billion bet on ETH2, good or bad?
The merge of Ethereum will decide whether the $22 billion Ethereum invested in the staking contract is a good or bad bet. Especially in the days before Merge, there was a huge increase in Ethereum invested in the ETH2 contract. This increased anticipation and excitement in ETH holders ahead of Merge. Withdrawals on staked Ethereums will be enabled with another upgrade approximately six months from today.
CME group launches Ether options in response to Merge
CME Group, a leading derivatives marketplace, announced the launch of Ether options in response to the rapidly growing demand for Ethereum derivatives ahead of the merge.
Where is Ethereum price headed after Merge?
Crypto analyst Alex Krüger has revealed the short-term bullish outlook on the merge, which took place just an hour ago. While the analyst pointed to a decline in the short term, he stated that ETH is quite “bullish” in the medium and long term.
NFTherder has warned traders in the crypto community against scams before and after Ethereum Merge. He said beware of fake staking pools, fake eth pow/pos airdrops, fake tweets.
Social interactions as measured by data provider LunarCrush hit an all-time high of 1.88 billion daily. For this reason, the majority of analysts continue to rise in Ethereum.
What is the latest situation in the price after the merge?
Currently, Ethereum is changing hands at $1,637, up 1.6 percent in the last 24 hours. The cryptocurrency had dropped from levels above $1,700 the other day, with Bitcoin also falling sharply. In the first minutes of Merge, he did gain a slight momentum, though not as expected.
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