Ethereum Shanghai Upgrade Brings Exciting Changes for ETH Holders

The highly anticipated Shanghai upgrade aims to bring some big changes to Ethereum. One of the most notable changes is that those who have staked ETH to secure the network will be able to withdraw tokens after the upgrade. This is a notable development for ETH holders, but will it put massive selling pressure on the cryptocurrency? The answer is probably no.

After the hard fork, those who locked up at least 32 ETH to secure a 4-5% APY staking reward will be able to withdraw some of their staked ETH immediately. However, those wishing to withdraw all staked ETH will have to wait between 1 and 36 days, reducing potential selling pressure. Furthermore, only 16% of ETH stakers are currently profitable, which means that most of them will not make the decision to sell anytime soon.

For some investors, selling ETH at this time is not a wise decision. It’s arguably one of the biggest risk assets in the world, with many investors leaning toward the long-term outlook. Also, Ethereum is a blockchain that sells block space for applications. So the more applications and users there are, the greater the demand for ETH will be. This means that adoption can exponentially increase the value of the network.

The supply side of the transaction relies on an independent party running a network node and receiving ETH as a refund. However, due to the new burn mechanism that burns small amounts of ETH per transaction, the supply is actually decreasing even though ETH is still being issued.

Volatility should slowly resolve as the impact of network adoption becomes apparent. The more people that join the Ethereum network, the higher the value of ETH, leading to more adopters. As the market capitalization grows, there will be greater and greater market volatility for shocks, thereby reducing large deviations in prices.

The upcoming Shanghai upgrade will be followed by more complex upgrades that lower fees on the Ethereum network, make it faster, and even more user-friendly. Despite the bear market, transactions on Ethereum have maintained a solid upward trend thanks to innovations such as NFTs and DeFi.

Regulatory uncertainty is a challenge for the crypto industry, but even as the U.S. tightens, countries like Dubai, Hong Kong and the U.K. are poised to lure companies into exile. Even if regulators put ETH in an outdated security category, it might not matter. Anyone can buy stocks in minutes using a mobile app.

The Shanghai upgrade is an exciting development for ETH holders and the entire Ethereum network. As adoption increases and supply decreases, ETH’s value will likely continue to rise in the long-term. Investors may want to keep a close eye on Ethereum in the coming months to see how the revolution evolves and how the market reacts to these changes.

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