• Ethereum chain war got intense as USD Tether threw its weight behind proof-of-stake ETH. 
  • BitMEX research team believes a chain split in Ethereum could result in a new coin. 
  • BitMEX launched a margin contract with 2x leverage in ETHPoW. 
  • Analysts believe Ethereum price could tap the demand zone between $1,560 and $1,640, before its rally.

Ethereum’s chain war started as a poll on Twitter by hedge fund Galois Capital. The battle between supporters of proof-of-work and proof-of-stake intensified as stablecoin USD Tether picked sides. It remains to be seen whether the Merge will result in a successful and stable transition to proof-of-stake, or a fork will precede the event. 

Also read: What will happen if the Ethereum Merge fails: ETC, ETH1 or ETH2?

Ethereum chain wars and how it started 

Kevin Zhou of Galois Capital sparked the debate of parallel Ethereum proof-of-work and proof-of-stake chains and a triple hardfork. Zhou believes it would be naive to exclude the possibility of a proof-of-work chain as miners like Chandler Guo are ready to fork Ethereum. 

Zhou believes there is a possibility that a hard fork results in three chains:

  • Ethereum proof-of-stake
  • Ethereum proof-of-work
  • Ethereum proof-of-work with difficulty bomb 

Zhou remains unconvinced of a successful transition to the proof-of-stake merge. The Galois Capital co-founder is convinced that hiccups or disagreement within the community could result in parallel chains and the adoption of ETHW (PoW chain) and a basket of Ethereum (both or all three chains) by exchanges, wallets and lending/ staking platforms. 

Exchanges and top crypto projects have started picking sides. Tether announced that the stablecoin has put its weight behind proof-of-stake Ethereum. Around the same time, BitMEX and Poloniex welcomed ETHW (proof-of-work) contracts. 

The BitMEX Research team recently published a blog on Merge and post-Merge possibilities. The team believes there is a likelihood of a chain split that could result in a new ETH proof-of-work (PoW) chain. ETHPoW Linear Futures Contract is now live on BitMEX, margined in USDT. The exchange is offering up to 2x leverage on the ETHPOWZ22 contract. 

Tether pledges support for Ethereum proof-of-stake

One of the largest stablecoins with a market capitalization of $66.47 billion has put its weight behind Ethereum’s proof-of-stake chain. Tether believes that in order to avoid any disruption to the crypto community, DeFi projects and platforms, the transition to PoS should not be weaponized. 

Tether announced that it is closely following the progress of Ethereum’s Merge, as the altcoin transitions to a power-efficient consensus mechanism. 

Tether is currently the largest stablecoin in the market, USDT remains the most used stablecoin on the Ethereum blockchain with three times more people holding Tether in their wallet than any other stablecoin. Therefore, Tether’s decision to support Ethereum’s proof-of-stake chain reassures the community of the stablecoin’s support for ETH foundation and the Merge. 

Analysts believe Ethereum price could plummet before run up to $2,000

@PostyXBT, a crypto analyst and trader evaluated the Ethereum price trend and noted that ETH is ahead of Bitcoin. The analyst argues that Ethereum price is likely to witness a drop before the next leg. 

Ethereum Perpetual Futures Contract 1-day

Ethereum Perpetual Futures Contract 1-day chart

@NekozTek, another crypto analyst shares the same view. The analyst has predicted a decline in Ethereum price to the demand zone between $1,560 and $1,640. 

Ethereum-USDT 1-day price chart

Ethereum-USDT 1-day price chart 

FXStreet analysts have identified buying opportunities in Ethereum price in the following video. 

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Price Forecast: Chances of pullback increase as miner selling ramps up

Bitcoin Price Forecast: Chances of pullback increase as miner selling ramps up

Bitcoin (BTC) price extends its decline for a second consecutive day on Wednesday, trading slightly down at around $87,600 after a 30% surge since November 5 pushed BTC to a new all-time high at $89,940.

More Bitcoin News
Crypto fraudster pleads guilty of taking part in $73 million laundering scheme

Crypto fraudster pleads guilty of taking part in $73 million laundering scheme

Daren Li, a Chinese citizen, pleaded guilty to conspiracy to help launder $73 million stolen in cryptocurrency scams. Li laundered funds using a network of shell companies and international bank accounts.

More Cryptocurrencies News
Cardano bulls show signs of exhaustion

Cardano bulls show signs of exhaustion

Cardano’s price is falling on Tuesday as it faces rejection around $0.624 and traders engaged in profit-taking following the recent rally. Technical indicators show signs of weakness in upward momentum as the RSI exits from the overbought territory.

More Cardano News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP could face pullbacks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP could face pullbacks

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trade in the red on Tuesday following strong rallies since last week, driven by crypto-friendly candidate Donald Trump's election victory. 

More Cryptocurrencies News
Bitcoin: Further upside likely after hitting new all-time high

Bitcoin: Further upside likely after hitting new all-time high

Bitcoin hit a fresh high of $76,849 on Thursday as crypto-friendly candidate Donald Trump won the US presidential election. Institutional demand returned with the highest single-day inflow on Thursday since the ETFs’ launch in January.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP