As part of a new blockchain, buyers will finally be able to get their hands on more than $33 billion worth of ether this week. With Shapella, a new software added to the Ethereum blockchain, market players will be able to get back their “staked ether,” which is money they put on the network and locked up three years ago in return for interest. According to figures from Dune Analytics, about 15% of all ether is staked, which gives it a market value of $33.73 billion.
Sreejith Das, CEO of Attestant, a company that helps people pledge ether, thinks that as many as 1,100,000 ether will be ready for release in a week after the blockchain is changed. At the present price of ether, which is about $1,860, this is worth close to $2 billion. Traders who want to stay ahead of the competition are trying to guess how this sudden surge of ether will affect prices. Robert Quartly-Janeiro, who is in charge of planning at the cryptocurrency exchange Bitrue, said that it’s hard to figure out what’s going on.
“The only thing we know for sure is that the Shanghai hard fork will cause some short-term volatility,” he said. Some market players worry that releasing staked coins will lead to a rush of withdrawals and sales, which could cause the price to drop quickly.
Bundeep Rangar, CEO of the blockchain business company Fineqia International, says that only about 29% of all ether staked by number is profitable in terms of dollars right now. This means that most of it would be sold at a loss.
“Because of this, it seems unlikely that much of the ether that has been staked will be sold,” Rangar said. Shapella would mean that investors who put in ether in exchange for a return since the start of the staking project in 2020 would finally get their money.
Ethereum developers set the stage for this change with a major update called “Merge” last year. This upgrade got rid of energy-intensive mining in favor of a “proof-of-stake” system, in which ether owners stake 32 coins to verify new records on the blockchain and earn more ether in addition to the “staked” coins.
Before this week’s planned update, investors who wanted to stake coins had to put down a minimum of 32 ether at a time, which at current prices is worth $59,520, for an infinite amount of time. This is a lot of money for the average market investor to put down.
Dave Weisberger, CEO of the digital asset-selling site CoinRoutes, said that many people and companies decided not to stake their ether before Shanghai because it would have been locked up for an unknown amount of time, which was dangerous.
After the update, ether staked on the blockchain won’t be locked, which may make buyers more likely to stake coins. In preparation of future growth, the market value of tokens backed by Lido Finance and Rocket Pool, two of the biggest projects that provide funding for crypto staking, has grown nearly sixfold to $2 billion and fourfold to $875 million, respectively, according to CoinMarketCap.
Rangar at Fineqia said, “It’s likely that the amount of ether staked will grow over time, especially when compared to the amount of supply staked for other digital assets like Solana, Matic, and Ada.” So, what kinds of buyers are most likely to get into the market because of what Shapella has done?
Das at Attestant said, “It will be the institutions that have been sitting on the sidelines, waiting quietly for this last piece of the puzzle to be put in place.” “These institutions had to be able to take out their ether before they could stake it.”
