Traders are betting heavily on Ethereum ahead of its Shanghai-Capella upgrade on April 12th. Popularly known as Shapella, the upgrade will enable staked ether withdrawals for the first time in the network's history, unlocking funds for validators. The minimum amount of ETH required to become a validator is 32 ETH, or close to $128,000 at the time of The Merge, when the network started accepting proof-of-stake. As a result of this, the liquidity of the network decreased significantly and the current number of validators is around 560,000.

Introducing the capability to withdraw staked ether will make it easier to enter the network. With a clear exit route, it is likely that more individuals and groups will be eager to join as validators, subsequently increasing the network's security. The upcoming event has caused a surge in the open futurist interest for Ethereum options on CME in March, reaching the highest level since May 2022. It's believed that traders are accumulating contracts to bet on which direction the price will swing after the update.

Paradigm's head of institutional coverage for America's, Joe Kruy commented on the situation. He believes that some of the closing out of short ETH positions is done for the purpose of monetizing the BTC/ETH volatility spread trade, rather than taking new risk before the event. Kruy also added that there has been some raised in vol buying as a hedge, however, it is dwarfed by the overall BTC activity.



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