Category Archives: Ethereum
What crypto investors need to know about Ethereum’s ‘Shanghai … – CNBC
Ether rose last week as investors looked ahead to the Ethereum network's next big tech upgrade. The second-largest crypto asset by market cap hasn't had the kind of rally it did leading up to its migration from a proof-of-work to proof-of-stake protocol in September. This week it added more than 4%, outperforming bitcoin, which gained less than 1%, and the major stock indexes. It gained 12% in March, though that was upstaged by the various forces that pushed bitcoin up 22%. Last year it rallied in the weeks leading up to the upgrade. ETH posted a 70% gain in July alone. It fell about 20% shortly after the upgrade was complete . The upcoming change, known both as the "Shanghai" upgrade and, more recently, the "Shapella" upgrade, is scheduled to take place April 12 and will allow investors to withdraw staked ether from the network for the first time ever. It's meant to strengthen Ethereum's proof-of-stake consensus mechanism, which it migrated to in September's "Merge" event, which ultimately would allow more liquidity to ether investors and stakers. "The upgrades represent a significant step for the Ethereum network, and while tough to say what ETH flows may look like post-upgrade, more liquidity will exist all else equal," said Alex Markgraff, analyst at KeyBanc. "Greater liquidity could be a catalyst for a change in institutional participation while simultaneously presenting commercial opportunity for staking providers." It's also meant to extend the migration that took place in September, meaning it should make the network faster, more scalable and more energy efficient than if it was a proof-of-work protocol. "This upgrade is a significant milestone in Ethereum's shift to proof-of-stake," said Andrew Ballinger, head of staking solutions at Canadian investment fund manager 3iQ. "The liquidity that comes with it will allow for greater participation in staking and as a result enhanced network security." ETH.CM= 1M mountain Ether (ETH) Here's what investors need to know about the next Ethereum update: Withdrawing your 'locked up' ETH While the Merge turned Ethereum into a proof-of-stake network and gave investors a bigger opportunity to earn passive yield on their ETH holdings through staking which includes locking tokens up on the network for a period of time Shapella will make it possible for investors to "unstake," or withdraw, their ETH. "Up until this point, staked assets were locked up indefinitely, and those who wanted to participate in the network and generate yield on their ETH holdings often had to get comfortable with an indefinite timeline for liquidity," Ballinger explained. There are several reasons someone might want to unstake their funds at any given point. Investors who may want to engage with other parts of the network, like buying NFTs or participating in a decentralized finance protocol, may be unable to with their funds locked up. Some staked their ETH before the emergence of liquid staking protocols emerged, Ballinger pointed out. Owen Lau, an analyst at Oppenheimer, noted that short-term traders may simply want to unstake their ETH to sell it especially at a time like now, when crypto prices including ether have been rising. However, he added, they're more likely to get an even bigger return by keeping their funds locked up. (When you stake your crypto, you contribute to the proof-of-stake system that keeps decentralized networks like Ethereum running and secure; you become a "validator" on the blockchain, meaning you verify and process the transactions as they come through, if chosen by the algorithm. The lock-up of your funds serves as a sort of collateral that can be destroyed if you as a validator act dishonestly or insincerely. For more, check out our staking primer here .) "Providing liquidity for staked ETH will allow a significant group of institutions and traders, who have been sitting on the sideline, the ability to finally participate in the network," Ballinger said. "And greater participation in ETH staking strengthens the security of the Ethereum network as a whole." Potential ETH selling pressure Many market participants have speculated that there will be a wave of negative sell pressure on the market as previously locked funds on Ethereum are released. Data from CryptoQuant suggests any sell pressure would be low, however. Typically, selling pressure emerges when market participants are sitting on extreme profits. Currently, however, the majority of the ETH staked (54%, or 9.7 million ETH) is currently at a loss, the firm said. The average depositors of the largest staking pools are also currently at a loss, according to the data. Ballinger pointed out that unlocking won't happen on day 1 of the update either. It could take as long as 30-60 days for participants to exit, due to the two-day "unbonding" period (the amount of time a blockchain delegator waits before they can move or sell their tokens) and a variable exit queue that changes based on the number of participants in line, he said. "Given there's a limited amount of participants that can exit in a day, this sell pressure will not be as instant or violent as advertised by some commentators," he said. "We still may see some sell pressure on the price of ETH, but it will come over a period of weeks a much healthier resolution for the Ethereum network."
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What crypto investors need to know about Ethereum's 'Shanghai ... - CNBC
Oil rally hits wall, Gold eyes record, Ethereum’s successful upgrade – MarketPulse
Oil
It looks like the rally in crude prices has finally hit a wall. It was a busy week for energy traders with the EIA short-term energy outlook, Colombias global energy summit, the OPEC monthly report, and nationwide strikes impacting French oil product shipments. WTI crude couldnt quite rally above the $83.45 level and traders decided that might be it for now. There was no strong catalyst for the oil price drop towards the $82.40 region as the dollar was steady and risk appetite was healthy as stocks extended gains. In fact, there was good reason to be optimistic about the short-term outlook for air travel demand following the Delta CEOs comments.
The oil market looks like it will remain tight but if this profit-taking selloff is gaining steam, prices could still have more to give as this rally started from the mid-$60s.
Gold
Gold prices are surging here as cooling PPI data and rising jobless claims bolsters Fed rate cut bets. This could be the moment for gold (in dollar terms) to make record highs. Gold is a hop, skip and a jump from record territory and it might take a major retail sales drop and disappointing start to bank earnings for it to get there. If gold can rally above the current record of $2,075.47/oz, it might not have much difficulty targeting the $2100 level.
Cryptos
Today is all about Ethereum and its successful Shanghai Upgrade. It took more than a few years, but now Ethereum is fully Proof-of-Stake. Withdrawals are allowed but it doesnt seem like any serious dumping is occurring. Ethereum is up 5.4% on the day, while Bitcoin has recaptured the $30,000 level, rising 1.6%.
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With more than 20 years trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the worlds most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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Oil rally hits wall, Gold eyes record, Ethereum's successful upgrade - MarketPulse
Cardano’s Comeback: Is the Ethereum Killer Ready to Dominate the … – CryptoTicker.io – Bitcoin Price, Ethereum Price & Crypto News
In several days, the Cardano price has been able to grow significantly again. Overall, network sentiment has improved following the first quarter of 2023 increases. The ADA price has witnessed significant growth, particularly at the start of the year. Furthermore, a large number of whales are presently investing in Cardano. Can the Ethereum killer get new traction in the approaching bull market?
Ethereum Killer: ADA/USD Weekly chart showing the price GoCharting
In the first quarter of 2023, the Cardano (ADA) price rebounded. The price of the ADA token plummeted dramatically in the fourth quarter of 2022. The rate was barely $0.24 by the end of 2022. Cardanos price was able to jump to $0.39 in January.
Cardanos price has returned to $0.30 after dipping in late February and early March. However, in the previous two to three weeks, the Cardano price has been able to stably grow again, reaching above $0.40 in recent days.
Last years steep losses were caused by more than just the bear market. Investors have been disappointed more than usual in recent months due to a paucity of applications in the field of decentralized financial services (DeFi). The Cardano blockchains Total Locked Value (TLV) has not risen as rapidly as planned.
Cardano may not become a viable alternative to Ethereum due to a lack of applications. Furthermore, many criticize Cardanos cautious development, which does not provide unexpected advances as rapidly as planned.
Cardano was widely regarded as the most well-known Ethereum killer for a long time. The Cardano blockchains advantages over theEthereum blockchainshould guarantee that the network becomes the more appealing foundation for decentralized apps. However, Cardano has not always followed this path.
Cardano may develop a large number of applications as a result of the bull market that may occur following Bitcoins halving in 2024. Numerous whales, including the well-known Grayscale fund, are similarly bullish on the future and have lately increased their holdings of the ADA coin.
Cardano, also known as ADA, has been dubbed by some as the Ethereum Killer due to its potential to rival Ethereums dominance in the smart contract and decentralized applications (dApps) space. While Cardano has not yet achieved the same level of success as Ethereum, it has been making significant strides in recent years and has been gaining momentum in the cryptocurrency market.
One of the key factors that could lead to Cardanos success in the next bull market is its unique approach to blockchain technology. Cardano uses a proof-of-stake (PoS) algorithm, which is considered to be more energy-efficient and scalable. This means that Cardano can process more transactions per second and can handle a larger volume of users compared to Ethereum, which has been struggling with scalability issues.
Another advantage that Cardano has over Ethereum is its focus on academic research and peer review. Cardanos development is led by IOHK, a blockchain research and development company that is comprised of a team of scientists and engineers with a strong academic background. This academic approach has led to a more rigorous and systematic development process, which has resulted in a more stable and secure blockchain.
Furthermore, Cardano has been making significant progress in its development roadmap. The project is currently in the Goguen phase, which focuses on the development of smart contracts and dApps. This phase includes the launch of the Plutus programming language and the Marlowe financial modeling language, which will allow developers to create complex smart contracts and dApps on the Cardano blockchain.
In addition to these technical advantages, Cardano has also been gaining traction in the cryptocurrency market. The project has a strong community of supporters, and its market capitalization has been steadily increasing. As of April 2023, Cardano is the third-largest cryptocurrency by market capitalization, behind Bitcoin and Ethereum.
Of course, there are still challenges that Cardano will need to overcome in order to become a true Ethereum Killer. Ethereum has a significant head start in terms of adoption and ecosystem development, and it remains to be seen whether Cardano can catch up. In addition, there are other competitors in the smart contract and dApp space, such as Solana, Binance Smart Chain, and Polkadot, that are also vying for market share.
There are currently many good exchanges that offer to trade and hold ADA. Heres a list of known exchanges that are currently in good standing:
On the other hand, it is always safer to hold your own coins in your own offline wallet. We suggest using aLedgeror aTrezorwallet.
While there is no guarantee that Cardano will become the Ethereum Killer in the next bull market, the project has several advantages that could make it a serious contender. Its focus on academic research, PoS consensus algorithm, and development roadmap all bode well for its prospects. Ultimately, the success of Cardano will depend on its ability to attract developers and users to its platform and to build a thriving ecosystem of dApps and services.
Full report: Will crypto prices go up until the end of 2023? Let's analyze what happened so far as crypto
3 main factors confirm that XRP price should reach 1$. In this XRP price prediction article, we list those 3
Altcoin prices did not increase as much as Bitcoin. In this article, we list the top 3 altcoins to buy
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Ethereum Classic (ETC) Goes Green on 2 Key Metrics, Is Major Rally Underway? – U.Today
Godfrey Benjamin
Ethereum Classic is shunning its woes to chart new bullish course
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Ethereum Classic (ETC) has joined the ranks of the altcoins with impressive growth ticks today. Per data from CoinMarketCap, the cryptocurrency is changing hands at $21.60 in what can be considered one of the biggest price uptrends over the past month.
The Ethereum Classic uptick is a somewhat surprising one, considering the fact that the broader crypto ecosystem is down by 0.48% to $1.23 trillion. Ethereum Classic is one of the legacy digital currencies in the Web3.0 world, and its community and backers are some of the most committed in the world.
As a fork of Ethereum, Ethereum Classic once rode on positive bullish sentiment from the Ethereum ecosystem; however, in recent months, Ethereum Classic has been anchoring its growth based on its own core fundamentals.
Ethereum Classic is bullish on two key metrics, including its daily growth rate, which is up by 2.23% and its total trading volume, which shot up by more than 121% to $366.3 million. The trading volume is indicative of legitimate fuel for the protocol, which can notably sustain growth moving forward.
Ethereum Classic has a number of ecosystem woes it is notably recovering from as it looks to regain its pace among the most elite digital currencies.
The crypto network once had a falling out with Cardano founder Charles Hoskinson, a clash that impacted the outlook of the ETC token as one without the backing of top leaders in the industry. Thus far this year, Ethereum Classic has recorded bouts of impressive price action, and from current growth, it is evident that some form of sustained bullish momentum might be underway.
The cryptocurrency has soared by 40% YTD and is showing signs that it will be building on this momentum.
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Ethereum Classic (ETC) Goes Green on 2 Key Metrics, Is Major Rally Underway? - U.Today
U.S. SEC To Introduce Proposal Targeting DeFi Crypto Exchanges – Ethereum World News
The United States Securities and Exchange Commission is taking on the decentralized finance (DeFi) space of crypto with its latest decision to reopen a proposal from last year. The SEC had introduced a plan in January 2022, in an effort to address the regulatory gaps that allowed platforms that allegedly offered securities trading but werent registered as a broker or an exchange with the securities regulator.
According to a report by Bloomberg, the altered proposal will reinforce the need for crypto exchanges and DeFi platforms to register with the SEC. The revised proposal reportedly contains language specifically designed to cover digital assets and the DeFi space, which the regulator believes falls under its jurisdiction. The decision to alter the proposal was taken at a meeting that was held earlier today.
Given how crypto trading platforms operate, many of them currently are exchanges, regardless of the reopening release were considering today,
SEC Chair Gary Gensler stated before the meeting that the new proposal would be in the interest of investor protection. The new proposal will bring a number of DeFi platforms under the purview of the securities regulator. However, SEC Economist Jessica Wachter believes that many of the newly covered firms will likely attempt to get an exemption under the Alternative Trading System exemption. The 2022 proposal was reopened after three of the five SEC Commissioners voted in favor of the move.
Hester Peirce, one of the five commissioners of the SEC, expressed her disappointment with the regulators decision to alter the proposal during the meeting. According to Peirce, the revised proposal would only serve the big players in traditional finance. She accused the regulator of being uninterested in facilitating innovation and competition in the financial markets. The proposal will be open for public comment for 30 days following its publication in the Federal Register. The public feedback will be incorporated in the final draft of the proposal which will go into effect after a majority approval by the Commission.
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U.S. SEC To Introduce Proposal Targeting DeFi Crypto Exchanges - Ethereum World News
Bitcoin, Ethereum Technical Analysis: BTC Back Above $28000 on Easter Weekend Market Updates Bitcoin News – Bitcoin News
Bitcoin was back above $28,000 on Saturday, as markets continued to react to the latest nonfarm payrolls (NFP) report. Figures released on Friday showed that 236,000 jobs were added to the U.S. economy last month. Ethereum was also back in the green to start the weekend.
Bitcoin (BTC) surged back above the $28,000 level on Saturday, as markets continued to react to the latest NFP report.
Payrolls came in at 236,000, which was marginally lower than the 240,000 sum many were anticipating.
BTC/USD rose to an intraday high of $28,159.86 earlier in todays session, less than 24 hours after trading at a low of $27,824.15.
Looking at the chart, it appears that the increase in price comes as the relative strength index (RSI) bounced from its floor at 58.00
As of writing, the index is tracking at 59.07, which has helped delay an inevitable downwards cross with the 10-day (red) moving average and its 25-day (blue) counterpart.
BTC is trading at $28,024.28 at the time of writing.
Ethereum (ETH) started todays session in the green, as prices attempted to move back towards the $1,900 level.
Following a low of $1,845.99 on Friday, ETH/USD climbed to a peak of $1,879.11 to start the weekend.
The move saw the worlds second largest cryptocurrency snap a two-day losing streak, after staying above a floor at $1,830.
Despite the slight increase in price, ethereums price strength remains below a key support point at 61.00.
As of writing, the 14-day RSI is tracking at 60.42, and should a breakout occur, there will be a greater chance of price moving above $1,900.
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Will ethereum continue to consolidate this weekend? Leave your thoughts in the comments below.
Eliman was previously a director of a London-based brokerage, whilst also an online trading educator. Currently, he commentates on various asset classes, including Crypto, Stocks and FX, whilst also a startup founder.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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Alt Season Approaching: Ethereum To Lead The Way, Big Eyes Coin, Binance, And Cardano Offer Investment – Bitcoinist
Ethereum (ETH) is predicted to have a major breakout, as the coin demonstrated impressive strength at a support level. Analysts suggest that this may indicate the start of an Altcoin Season. To help investors make the most out of this trend, a list of recommended coins to invest in has been compiled, including Binance, Cardano, and the up-and-coming Big Eyes Coin (BIG), which recently moved up its launch date.
According to crypto analysts, Ethereum (ETH) is predicted to experience a significant breakout, given its recent strength in holding the crucial support level between $1700 and $1780. Additionally, 1.4 million addresses bought 6.48 million ETH during this time, indicating a growing interest in the asset. With the support level in place, there is no resistance to further increase in Ethereums value.
Moreover, Ethereums prices have successfully flipped on its Bitcoin daily chart, showing oversold conditions against Bitcoin after eight months of lows. The last time this happened, Ethereum reached new highs on the ETH/BTC Chart, indicating that Ethereum is likely to make a prolonged comeback. With these developments, analysts believe that Ethereum is on track for a notable surge.
As Ethereum (ETH) shows incredible strength against Bitcoin, the crypto market could see a potential surge in Altcoin Season, according to crypto analyst Miles Deutscher.
With so many altcoins to choose from, investors may feel overwhelmed. However, there are a few altcoins worth keeping an eye on, including Binance (BNB) and Cardano (ADA).
Binance (BNB) is a leading contender for investors this alt season as it is used for transaction fees and trading on the Binance exchange. Moreover, Binance has added new services, such as the Binance Smart Chain and an NFT marketplace. Its impressive track record of evolution and adaptability in the market further enhances its utility.
Cardano (ADA) stands out with its Ouroboros proof-of-stake model, which makes it an open-source blockchain that is secure, scalable, and efficient. In addition, Cardano offers solutions for common issues faced by other cryptocurrencies, such as voter fraud, rule adherence, and interoperability, adding to its reliability and potential success in the upcoming season.
Big Eyes Coin (BIG) has had an incredible presale run, generating a lot of buzz in the crypto community. The presale has raised an impressive 32.5 Million, and it shows no signs of stopping soon.
The coins features include loot boxes that guarantee amplified returns, a Token Card Collection that can be minted as NFTs, a tax bar within the ecosystem, and 80% supply availability on launch day. Furthermore, 5% of the total supply is set to be donated to organisations working towards cleaning oceans.
BIG investors and community members are in for a surprise, as the coin has just announced a special offer as a gesture of gratitude for being a member of the community. Users who buy using BIG, Loot Box, or other options will receive a 250% bonus by using the code BULLRUN250.
As Ethereum prepares to break out, the altcoin market is poised to flourish, marking the beginning of the Alt Season. Coins such as Big Eyes Coin demonstrate that they can be a smart investment choice for investors, as they can offer significant returns to the community.
Find out more about Big Eyes Coin (BIG): Presale: https://buy.bigeyes.space/Website: https://bigeyes.space/Telegram: https://t.me/BIGEYESOFFICIAL
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Ether is rallying ahead of major upgrade that will let holders more easily access their tokens – CNBC
Ethereum underwent a huge network upgrade called the merge which proponents say will make transactions much more energy efficient. Following the merge, ether prices have dropped following a huge run up ahead of the event.
Jakub Porzycki | Nurphoto | Getty Images
Ether has spiked this week to a nine-month high, ahead of a major network upgrade that some crypto enthusiasts say will make the digital currency a more profitable long-term investment.
The world's second-biggest cryptocurrency is up about 6% over the past three days, surpassing $1,900, while bitcoin is roughly flat over that stretch.
Beginning next Wednesday, an upgrade to the blockchain, dubbed "Shapella," will allow owners of ether to withdraw their assets. Up to this point, investors would have to use centralized exchanges like Coinbase or decentralized finance (DeFi) protocols like Lido, to essentially exchange their locked-up ether for a token of equivalent value.
The recent rally has followed a similar pattern to past bouts of enthusiasm surrounding network upgrades. In September, ethereum ran up ahead of a historic transition to a more energy-efficient way of securing the network, called proof-of-stake.
Ethereum previously had a vast network of miners all over the planet running highly specialized computers that crunched math equations in order to validate transactions. After the so-called "Merge" upgrade in September, ethereum migrated to a proof-of-stake system, swapping out miners for validators. Instead of running large banks of computers, validators leverage their existing cache of ether as a means to verify transactions and mint new tokens.
"Ether itself becomes a productive asset," said Danny Ryan, a researcher at the Ethereum Foundation, regarding the September upgrade. "It's not something you might just speculate on, but it's something that can earn returns."
In the post-merge era, ether has taken on some characteristics of a traditional financial asset, paying interest to holders.
"It's probably the lowest-risk return inside of the ethereum ecosystem," said Ryan, adding that yield in other corners of DeFi involve smart contracts and other types of counter-party risk.
So far this year, ether has underperformed bitcoin, but recent gains have helped to close the gap. Ether is up nearly 59% this year, versus bitcoin's gain of 70% in 2023.
Currently, over 18 million ether tokens worth about $32.5 billion are staked, meaning that 15% of ether's total supply are considered locked assets.
While the coming upgrade will unlock much of that value, giving holders more control over their assets, there's some concern that the release of so many tokens will have a flooding effect of sorts on the market. Even with capped withdrawals, some $2.4 billion worth of ether could hit the open market, K33 Research said in a note on Tuesday.
"A plunge is likely to happen shortly after the completion of the upgrade, as a huge amount of ETH will be unlocked, and many people will also be selling their ETH," said Ilya Volkov,who runs a blockchain-based fintech platform. Volkov said he's bullish over the long term.
The ratio between the open interest ofether put and call options reached its highest level since May on Tuesday, according to data presented by crypto data analytics and news firm The Block. That could signal a buildup of bearish bets leading up to the network upgrade.
According to research from Bernstein, of the 18 million ether tokens locked on the blockchain, almost 70% are staked through protocols like Lido, creating a measure of liquidity for investors.
"Liquidity for 70% of staked ETH is not new, they could do it anyways," Bernstein wrote. The firm described the remaining 30% of holders as "original believers," who are unlikely exit their positions at this price.
Having the ability to deposit and withdraw tokens might encourage more investors to stake ether, and some analysts said they expect a significant influx of capital onto the network once it proves that money that's been staked can be taken out with relative ease.
WATCH: Bitcoin climbs as investors shrug off regulatory concerns
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Will Shapella Update Affect Ethereum Price? Analysis Sheds Positive Light | Bitcoinist.com – Bitcoinist
The upcoming Ethereum upgrade, called Shapella, scheduled for April 12, has raised many questions in the cryptocurrency community about what it might mean for the second-largest cryptocurrency. There have been suggestions that this update which will enable validators to withdraw their staked ethers (ETH), would negatively impact the coins price.
According to speculations, if holders decide to sell their cryptocurrency holdings for profit, it could lead to a decrease in market demand and a subsequent drop in the prices of Ethereum.
However, despite this potential outcome, CryptoQuant, a company specializing in data analysis, has allayed fears, saying that the selling pressure may not be significant. The company argues that based on its profit and loss analysis, there is likely to be minimal selling pressure on ETH resulting from staking withdrawals after the upgrade.
The company predicts there wont be significant selling pressure because most ETH staked (9.4 million ETH, equivalent to 52% of the total) is currently at a loss. On the other hand, the company notes that the average depositor in the largest pools is also experiencing losses.
Related Reading: Dogecoin Decline Not A Deterrent As Majority Of DOGE Holders Remain In Profit
In this context, its unlikely that these market participants would sell their ETH at the current price and make a profit or recover their entire investment. This is because they invested in these activities when the cryptocurrency was trading at a higher value than it is currently. According to CoinMarketCap, the current price of ETH is around $1,800.
Furthermore, the company highlights that staked ETH, which is currently in profit, is generating a yield of up to 30% or less, which they consider relatively low compared to the significant profits that the Ethereum market can sometimes provide through its price volatility.
Based on this, CryptoQuant emphasizes that selling pressure arises when market participants make extreme profits, which is not currently true for staked ETH. This means there may not be a significant drop in ETHs price due to the Shapella update.
Related Reading: Bullish On Ethereum, Survey Shows Community Predicts New All-Time High In 2023
On Wednesday, April 5, 2023, the price of ether (ETH), the cryptocurrency of the Ethereum network, rose above $1,900, a level it had not reached in 8 months. The last time ETH hit this price point was August 15, 2022. In contrast, Bitcoin (BTC), the leading cryptocurrency in the market, has not seen a similar increase. According to TradingView, BTCs price briefly touched $29,000 twice during the last two weeks of March 2023.
The fact that ETH is experiencing an increase while BTC does not suggests that the current price increase of ETH is not driven by BTCs movement, which is typically the case. Instead, it is driven by the internal Ethereum market. According to analyst Miles Deutscher, this is because investors are showing interest in ETH in anticipation of the upcoming Shanghai (Shapella) update.
Shapella represents a significant change that Ethereum will implement on its network on April 12, enabling the withdrawal of staked funds. Therefore, the anticipation of this event may have contributed to the recent increase in the price of ETH. Furthermore, various players in the industry, including Binance US and Huobi exchanges, have taken the initiative to remind the public about the upcoming update this week.
Featured image from istock.com, chart from Tradingview.com.
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What to Expect from Ethereum’s Shapella Fork: Insights from ITB’s Head of Research – CryptoGlobe
Lucas Outumuro, Head of Research at crypto analytics startup IntoTheBlocks (ITB), recently published a blog post titled Estimating the Impact of Ethereums Shapella Upgrade, in which he analyzes the short to medium-term effects of the upcoming $ETH unlocks. In his post, Outumuro breaks down the dynamics of the Shapella fork, the likely outcomes for different industry players, and its implications for the Ethereum network and its native asset.
Outumuro explains that the Shapella fork, set for April 12, 2023, marks the culmination of Ethereums transition to proof of stake (PoS), with validators able to begin the process of withdrawing over $34 billion in staked funds. He acknowledges the uncertainty and lack of understanding surrounding these withdrawals and aims to shed light on the process.
The Shapella fork consists of two conjoined upgrades: Shanghai, which includes Ethereum Improvement Proposals (EIPs) related to the execution layer, and Capella, a major update to Ethereums consensus layer. The most notable EIP set to be implemented in Shapella is EIP-4895, which enables validators to start withdrawing their staked ETH in two categories: partial withdrawals (staking rewards only) and full withdrawals (initial deposits and profits).
Outumuro delves into the key actors in the staking industry and how the Shapella fork affects them. Liquid Staking Derivatives (LSDs), which currently make up over 35% of all ETH staked, are expected to see net inflows after Shapella due to their liquid nature and lack of exit queues. Unidentified validators, a heterogeneous group, are likely to withdraw some ETH but not necessarily sell it, as many may be long-term ETH believers.
American centralized exchanges (CEXs) like Coinbase and Kraken, which hold nearly 20% market share of ETH staked, are likely to experience the largest withdrawals following the Shapella fork due to government intervention. Some of their users may sell their assets, while others may withdraw the ETH and hold it or move it into LSDs.
Staking services, which manage validators on behalf of clients, are expected to conduct partial withdrawals to cover their operating costs, but full withdrawals are less likely. International crypto exchanges could see net inflows and some selling.
Outumuro suggests that the dynamics of the Shapella fork could lead to a reshuffling of market share between industry players. While withdrawals might decrease the amount of ETH staked in the days after Shapella, several factors could lead to an increase in the following weeks.
Coinbases Head of Staking predicts that the amount of ETH staked will follow a J-curve, declining before climbing. This is due to the elimination of technical and economic risks associated with staking after the Shapella fork. Outumuro also notes that the percentage of ETH supply staked is significantly smaller compared to other PoS chains, which could change after the fork.
As the risks associated with staking are reduced, retail and institutional investors might be more inclined to stake their ETH. This could lead to an increase in the amount of ETH staked over time, potentially reaching 25%-30% within a year, making the Ethereum network more secure and reducing the available ETH supply to be sold.
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What to Expect from Ethereum's Shapella Fork: Insights from ITB's Head of Research - CryptoGlobe