After the successful implementation of Ethereum’s Shanghai upgrade, network participants can now withdraw staked ETH. Surprisingly, the price of ETH remained stable for several minutes. This is noteworthy because the upgrade was a historic milestone for Ethereum. Furthermore, the price of ETH even experienced a slight increase during this time period.
ETH remained stable immediately after the merge. We even saw a slight increase, bringing the price to $1,919.50. Furthermore, (ETH/USDT – Trade it here) is currently trading at $2,016.13, a level long forgotten. However, what’s more noteworthy is the fact that the price of ETH did not experience a significant drop following the successful implementation of the Shanghai upgrade. Price drop is usuallt a common occurrence after major events affecting assets. Typically, traders buy a particular asset in anticipation of such events and then sell it off in large numbers once the event is over.
In September, ETH saw a huge 8% decline during the merge event that transitioned Ethereum to proof of stake. Despite the success of the event from a technical standpoint, the impact on ETH was significant.
In contrast, the Shanghai upgrade, did not have the same effect on the price of ETH. This upgrade marked the completion of Ethereum’s transition to a proof of stake network. Now, users stake their ETH with the network to validate on-chain transactions and are rewarded with newly generated ETH. The upgrade also enables users to withdraw their staked ETH from the network. It was previously been locked up and inaccessible, with a total value of $35 billion.
Why is Ethereum Still Going up?
ETH gained almost 5% in 24 hours, trading at $2,016.13 at the time of writing. You can check out the live token price right here. Users can now withdraw their staked ETH. Once users do so, Ethereum will be looking at some liquidity problems. So, why is it still going up?
One possible reason for the stability of ETH’s price after the Shanghai upgrade is that a significant amount of staked ETH was already accessible before the upgrade. This is because the majority of staked ETH was deposited with Ethereum through intermediary staking pools and centralized crypto exchanges, which often issue staking tokens to customers. As a result, much of the capital that was supposedly locked up pre-Shanghai had already been liquid for some time.
According to Jacobc.eth, head of product at Ethereum layer-2 Mantle, most people had already been able to sell their staked ETH for some time because many of these intermediary platforms have liquid staking programs, such as Lido or Rocket Pool. Therefore, the Shanghai upgrade may not have represented a major shift in the economics of Ethereum.
Conclusion
It’s worth noting that stakers who deposited their ETH through intermediary staking pools or centralized crypto exchanges may still have to wait a while before being able to withdraw their staked ETH. Lido, for instance, has announced that it will introduce the capability to withdraw staked ETH for its customers in about a month.
It’s important to keep in mind that each intermediary ETH staking service will have its own timeframe for rolling out withdrawals. As such, some customers may be able to access their staked ETH sooner than others depending on the platform they used to deposit their ETH.
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