“Buy Bitcoin, sell Ethereum”: A guy sold off his ETH before the upcoming merge — is this a viable strategy?

Ethereum is rising in value. At the time of writing, the coin is trading at $1.6k. One of the reasons, according to experts, is related to the upcoming merge, the process of switching the network from the Proof-of-Work to Proof-of-Stake mechanism. The event is scheduled for September, but the developers and Ethereum co-founder Vitalik Buterin do not stop talking about what will change after the migration. 

Vitalik recently shared his views on the future of Ethereum at the Ethereum Community Conference. Usually, when mentioning the merge, the CEO of the project talks about an increased focus on security, stability, and decentralization, but this time his vision went beyond the usual. Here’s what he said: 

• Ethereum is 55% complete after the Merge. In January, he said the team was to bring the altcoin roadmap realization to 80% in 2022, with the whole process to be completed in six years.
• Ethereum should, over time, “settle down.” 

“At some point, the rate of change for the protocol is going to have to slow down. And then Ethereum will look somewhat more like a system that optimizes for safety and predictability, and less an ecosystem that optimizes for impressing and dazzling people,” he said. 

• It is dangerous if Ethereum becomes so complex that no single person can understand the protocol. Buterin warned against adding support for multiple virtual machines and getting too comfortable with technologies like SNARK.
• Instead of increasing complexity, the focus should be on decentralization.
• After the appearance of quantum computers, Ethereum will have to switch to different cryptography. 

After Buterin’s statements about Ethereum’s bright future, there is a feeling that the project has good prospects. Of course, this is excellent news for those who invest in Ethereum, and it would seem that many will blindly pour all their savings into it and wait for a miracle. But without a competent analysis, it is still impossible to make a good profit, that’s why investors develop their own strategies. Let’s get acquainted with one of them. 

“Why I sold my Ethereum”

This story, or rather the strategy, belongs to crypto investor Isaiah McCall. According to him, he sold most of his Ethereum savings and still holds only a little bit. Now he feels he understands the value of an asset. Let’s check what he came up with. 

• The main “trick” is that he sold the asset during a recession (a steady and significant decline in the exchange rate). The author didn’t wait for Ethereum to fall to the level of the Earth’s crust because he knew that the coin would suffer much more than the stock market. Therefore, even though inflation was high, Isaiah preferred to hold cash at the moment.

“For now, this means I’m going to sit on my cash and wait for a fair buying opportunity. I’m not sure if $20k was the bottom for Bitcoin or if $1k was the bottom for Ethereum, but for now, I’ll sit on my hands and wait,” he said. 

• Buy more Bitcoin, not more Ethereum. According to the author, even Ethereum 2.0 has more problems than Bitcoin. The chances of losing money when investing in Ethereum are much higher.

“Bitcoin is digital gold, and I want more of it. That’s why going forward, I’m balancing my crypto portfolio 64/40 in favor of Bitcoin,” told the author. 

• Also, to estimate Ethereum and Bitcoin, Isaiah referred to what is known as Metcalfe’s law. It says that the more people use a network, the more valuable it becomes. Therefore, if cryptocurrencies have supporters, their success is guaranteed. Thus all investments will pay off.

“Bitcoin and Ethereum’s networks were parabolic up until the 2018 crash and once again. This doesn’t mean the technology isn’t valuable; it just means we’re in a valley of disillusionment at the moment,” he says. 

So, we’re waiting for takeoff, guys? Haha. 

• Here’s something else. Maybe you don’t believe it, but “This is the greatest generational buying opportunity.” This is probably a message to those who have not yet grabbed a portion of their crypto pie and are afraid to enter the industry. The author is sure that we’re only at the beginning of this financial revolution, and there will still be many opportunities 15 years down the line. 

So, he plans to hodl. Right now, mainly in fiat assets, but it’s just his strategy to get more in the future. And what about yours?

You can read full Isaiah’s article on Medium.