A closely followed crypto analyst said the possibility of a new fork of Ethereum (ETH) has made him very bullish in the non-fungible token (NFT) sector.
A pseudonymous trader known as Kaleo To tell His 530,000 followers are eyeing an upcoming merger of Ethereum to the Beacon Chain, which already runs a proof-of-stake model.
While many are looking forward to a big Ethereum update, some are critical of it, fueling debate about a possible hard fork to the post-merge Proof of Work (POW) chain. I’m here.
In such a situation, NFT holders could essentially double their collections, as all non-fungible tokens on Ethereum would likely also exist on the new chain, Kaleo says.
“Hypothetically, let’s say we have a semi-executable ETH proof-of-work fork that emerges after a merge (for simplicity, let’s call it pETH).
ETH NFTs owned before the fork are owned by both chains.
…if any DEX (decentralized exchange) supports pETH, there will undoubtedly be a significant volume of NFTs on forked chains. The community is beginning to speculate which will become the dominant chain. ”
Kaleo uses the price action of Bitcoin Cash (BCH), forked from Bitcoin (BTC) in 2017, as an example. According to a crypto analyst, there has been a temporary phase in which BCH appears to be competing with his BTC.
“We take the 2017 BCH as a case study.
After the fork, there was a fair amount of brief hype with 1 BCH climbing close to 0.45 BTC.
Clearly, there has been a sharp decline since then, but that doesn’t change the potential behind the speculative nature of the original bet. ”
Ethereum’s proof-of-work fork could be considered the ‘original’ (OG) version of the top smart contract platform, so Kaleo may see some investors put more value in the fork’s NFTs I’m guessing.
“When it comes to the nature of NFTs, a big draw for many collectors is their OG status. [CryptoPunks] for example.
If the POW chain develops its own viable ecosystem in the future, who says there will be no narrative to own OG NFTs on the “OG chain”? ”
Due to this potential scenario, Kaleo says he is currently “incredibly bullish” on some of the top Ethereum-based NFT collections.
“In summary, that’s one of the main reasons I’m still incredibly bullish on OG blue chip ETH NFTs heading into mergers, and as these stories continue to develop, the current NFT market lull will continue to grow. I believe it will soar.”
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