Major Shanghai Upgrade is Coming to The Second-Largest Crypto, Ethereum
Trends

April 5, 2023
The world’s second-largest crypto by market cap, Ethereum ($ETH), is flirting around the $1.9K level — its highest level in nearly 8 months.
- The token is up ~91% since last June (with lots of volatility along the way).
- It’s managed to survive several crypto implosions, the collapse of FTX and March’s banking crisis.
The next major event: Another major upgrade (Shanghai) is expected to arrive in April — completing its transition to proof-of-stake.
What does the upgrade mean for $ETH holders?
Staking allows users to lock up their $ETH to earn interest. With the upgrade, staked Ether can now be withdrawn.
~$34B (15% of the total ETH supply) will become available to sell — which could add selling pressure to the token.
And it’s become one of the biggest debates in crypto: Will $ETH holders sell or not?
The bear case: Selling pressure could come from crypto platforms (i.e., Kraken), which is facing scrutiny from US regulators. Celsius is also expected to sell their staked $ETH holdings as part of bankruptcy proceedings.
The bull case: K33 Research doesn’t think a big selloff is coming — saying $2.4B could be sold — a small amount compared to 20% of $ETH’s daily trading volume.
- Saxo Bank’s crypto analyst Max Eberhardt says the large share of ETH stakers are long-term holders unlikely to sell after the upgrade (CoinDesk).
- The selling pressure could also be offset by buyers seeing $ETH as more attractive after the upgrade.
Other ETH updates: The total supply of $ETH has fallen 0.118% since the merge last September.
The token is now deflationary — like a company that only buys back its own stock or a deflationary currency (but we know those don’t exist).