The Ethereum Shanghai Upgrade goes live on Wednesday, giving investors access to around $37 billion worth of staked ETH for the first time. What consequences does this have for the ether course?
The time has almost come : On Wednesday, Ethereum stakers will have access to their Ether, which has been blocked since December 2020, for the first time. With the upgrade known as Shanghai or Shappella, around 18.2 million staked Ether can be withdrawn from the Ethereum Staking Contract for the first time. Many in the crypto industry fear there will be high selling pressure from the released ethers. However, looking at the on-chain data and the rules for staking withdrawals set out in the Shanghai Code, no massive ETH sell-off seems imminent at the moment.
How high will the selling pressure for Ethereum become?
After Shanghai, ethers can be extracted for the first time, i.e. paid out – but with restrictions. A distinction is made between ETH from staking rewards and ETH that each of the 566,000 validators must deposit in order to operate a staking validator. The former can be taken off faster, the others only gradually.
According to estimates by crypto analysis firm Delphidigital.io , the maximum selling pressure from these sources in the first few days after Shanghai could be around 288,000 Ether, which at current ETH prices equates to around $550 million a day. However, it seems unlikely that all stakers will decide to sell immediately after Shanghai.
However, much more important for the long-term development of Ethereum than this estimate is how the number of Ethereum validators behaves after the merge. Basically, there are two scenarios that will play a decisive role in the selling pressure after Shanghai: Investors are staking more ether, which is to be considered bullish. Bearish, on the other hand, could be existing validators withdrawing their ether.
But why should investors stake more when withdrawals are allowed? In contrast to the last three years, the successful Shanghai upgrade reduces staking risk. This is because staked ETH is no longer locked indefinitely as a result of the upgrade. From the perspective of many investors, ETH could therefore become a more attractive investment.
That’s what the on-chain data says : A look at the on-chain data from Metrika.co shows that currently only 43 percent of all ETH validators are authorized to sell their staked ether directly to Shanghai.
Furthermore, according to Glassnode , currently only 0.9 percent of all Ethereum validators have decided to sell all their staking Ethereum to Shanghai as soon as possible.
Expect this number to continue to rise ahead of Shanghai as many validators look to take profits and minimize their risk. However, it would be surprising and bearish for ETH if this number spikes. That’s why you should keep an eye on this indicator ahead of Shanghai. In addition to the selling pressure from ETH from staking rewards, it is crucial for the short-term price development. It also reflects staking validators’ confidence in a successful Shanghai upgrade.
When can I sell my staked Ethereum?
Wrapping your ETH2 allows you to sell or send your staked ETH immediately before a future Ethereum network upgrade, which may happen as soon as 2023. cbETH can also be used in DeFi and other dapps that support ERC-20 tokens. You can also unstake your ETH2, but you will have to wait through the unstaking period.
Who is the largest ETH Staker?
Lido DAO, the biggest Merge staking provider, accounts for the largest amount of staked ETH with a 31% share, while a fifth unlabelled group of validators holds 23% of staked ETH.
What will happen to my staked Ethereum?
ETH staking rewards will be reflected in your Staked ETH balance and under ‘Lifetime Rewards’ and will be added to your account on a regular basis. If you wrap your staked ETH into cbETH, you will still earn rewards, but not directly through Coinbase.
Ethereum price prediction: Post-Merge ETH recovering
Hopes that Ethereum (ETH) would thrive after its transition from a proof-of-work (PoW) to the proof-of-stake (PoS) consensus mechanism were dashed, at least for the time being, with the coin falling 25% in the three months from the date of The Merge to the start of 2023 and only breaking past the price levels it set around the time of the changeover six months later.
Like other cryptocurrencies, ETH was hit by the market crash triggered by the collapse into bankruptcy of the FTX (FTT) exchange, after a planned takeover by Binance (BNB) and its subsequent cancellation.
The news saw ETH plunge from a daily high of $1,574.80 on 8 November 2022 to a low of $1,083.29 the following day, before making a recovery to trade at a high of $1,346.17 on 14 December. It then fell to trade at around $1,207.49 on 3 January before a bouyant market saw it reach $1,732.80 on 15 February 2023.
Ethereum price prediction round-up
Let’s take a look at some of the ether price predictions that were being made as of 6 April 2023.
Keep in mind that price forecasts are often wrong. Also, it is important to note that long-term crypto price predictions are often made using an algorithm, which means that they can change at a moment’s notice.
CoinCodex gave a short-term ethereum crypto price prediction for 2023 that estimated ETH could fall to $1,755.53 by 11 April before bouncing back to $2,529.09 by 7 May. The site’s technical analysis for ether was bullish, with 23 indicators sending out upbeat signals and just seven making bearish ones.
Gov Capital had an ethereum price prediction for 2023 that suggested the coin could reach $2,425.67 by the end of the year, before climbing to $4,874.19 by the end of 2024 and just below $7,145.42 by the end of 2025.
DigitalCoinPrice had an ethereum price prediction for 2025 that said ETH could reach $6,052.13 that year, lower than Gov Capital’s 2025 ETH price prediction. DigitalCoinPrice projected that the ETH price could average $3,988.31 in 2023 and $4,535.80 in 2024. The site also suggested that the price could reach around $19,150.82 in 2030, based on historical data.
PricePrediction maintained a bullish long-term ethereum forecast that projected ETH could be worth around $2,324.98 in 2023, $3,378.27 in 2024 and $5,004.99 in 2025, based on its artificial intelligence-assisted technical analysis. The website’s ethereum price prediction for 2030 suggested the price could soar to $29,118.95.
When looking for ETH coin price predictions, it is important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates.
As such, analysts and algorithm-based forecasters can and do get their predictions wrong. If you are considering investing in cryptocurrency tokens, we recommend you conduct your own research. Look at the latest market trends, news, technical and fundamental analysis, and analyst opinions before making any investment or trading decisions.
Keep in mind that past performance is no guarantee of future returns, and never invest any money that you cannot afford to lose.