The upcoming Shanghai Upgrade of Ethereum is set to be one of the most significant changes in the blockchain networks architecture. With the change, all Ether that has been locked into the network will now be able to be withdrawn. This unlocking of Ether could cause considerable pressure on the market, with the potential for around $2.4billionUSD of Ether to be sold into circulation. This will add to the already circulating 18 million Ethers that has been staked within the network since December 2020.

For some, the unlocking of their Ether will be very welcome, especially for those who have seen the number of Ether soar since February 2021 when the token was trading 63% below its all-time high (ATH). Since then, Ether has made a price gain of 60% according to press time figures.

However, some of the Ether that is available to be withdrawn could be subject to an offering of sale by exchanges. Such will be the case with Kraken, who have recently come under speculative pressure by the U.S. regulators. They will have to de-stake all Ether funded by U.S. based investors, and are likely to offer it to the market where buyers can match the sale pressure.

Furthermore, the liquidation of 165,176 Ether owned by the bankrupt cryptocurrency lender Celsius could hit the market too. This is part of their recovery process as they try and reimburse creditors. Lastly, an estimated 1.1 million Ether held by staked miners could also be released, adding to the market pressure.

The effects of the Shanghai Upgrade needn't be so dramatic, however. Firstly, it will take days to weeks for the full withdrawals to be made, meaning that the market pressure should be spread out and buyers should be able to match the sale pressure.

Secondly, K33 Research Analysis showed that 46.3% of Ether staked is in profit as the market rate is higher than the rate when it was locked in the network, and 28.04% of staked Ether is higher than a 20% profit. 66% of this is held by long-term investors, many of whom are unlikely to de-stake any of their coins.

In conclusion, while it is true that the Shanghai Upgrade of Ethereum may cause some serious selling pressure to the market, it can be countered as there are multiple large-scale investors who are unlikely to de-stake their Ether and buyers should have time to balance out the sale in an orderly fashion.



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