Investors will be able to access over $33 billion worth of staked ether this week through a software upgrade to the Ethereum blockchain called Shapella.The upgrade will allow investors to redeem their staked ether, which they deposited and locked up on the network over the past three years in return for interest.About 15% of all ether is staked, with an estimated 1.1 million ether worth nearly $2 billion available for withdrawal in the week following the upgrade.Some worry that this could lead to massive withdrawals and selling, but most staked ether is currently in loss, making it unlikely to be sold.
Investors in the cryptocurrency market are eagerly anticipating the release of more than $33 billion worth of ether this week, following a planned upgrade to the Ethereum blockchain.The upgrade, known as Shapella, will allow users to redeem their “staked ether” coins that have been deposited and locked up on the network for the past three years in return for interest.Data from Dune Analytics reveals that about 15% of all ether is staked, equating to a market value of $33.73 billion.
Following the release of the upgrade, up to 1.1 million ether will be available for withdrawals, estimated to be worth nearly $2 billion based on the current ether price of about $1,860.However, traders are uncertain how this sudden influx of ether will impact prices.Robert Quartly-Janeiro, chief strategy officer at crypto exchange Bitrue, commented that “the only thing certain is that the Shanghai hard fork will bring about some short-term volatility.”
Some industry experts are concerned that the unlocking of staked coins could lead to mass withdrawals and a wave of selling, causing prices to plummet.
However, Bundeep Rangar, CEO of blockchain investment firm Fineqia International, believes that this is unlikely, as only about 29% of all ether staked by volume is currently in profit in dollar terms, meaning that most would be sold at a loss.
The Shapella upgrade marks the end of a long wait for investors who had deposited ether in exchange for a yield since the staking project began in 2020.Prior to the upgrade, investors had to deposit a minimum of 32 ether at a time (worth $59,520 at current prices) for an indefinite period, which was beyond the reach of most retail investors.The upgrade will allow a larger number of investors to participate in staking and earn interest on their ether holdings.
Ethereum developers paved the way for the Shapella upgrade with a major upgrade called the “Merge” last year.The Merge ditched energy-intensive mining and moved to a “proof-of-stake” system, where ether owners lock up 32 coins to check new records on the blockchain and earn new ether on top of their “staked” coins.The Shapella upgrade is the final piece of the puzzle, allowing investors to unlock their staked ether and access their earnings.
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As the last point, the release of more than $33 billion worth of ether represents a significant milestone for the Ethereum blockchain and the cryptocurrency market as a whole.The Shapella upgrade will allow a larger number of investors to participate in staking and earn interest on their ether holdings, marking a new era of accessibility and inclusivity within the industry..
