Traders Are Betting On ETH With Ethereum’s Next Big Milestone Ahead
The Merge, which began on the alternative cryptocurrency network in September 2022, was the most notable update to the Ethereum (ETH) network. The goal of this ETH hard fork was to implement the proof-of-stake (PoS) consensus mechanism. All of us are eagerly anticipating the next update, Shanghai hard fork.
Traders have very high hopes for the update, which is scheduled for 2023. Staking cryptocurrency units on the Beacon Chain will be unlocked and made available for trade as part of the upgrade, which should increase Ethereum’s market liquidity. But what market prospects exist ahead of the main update?
What Traders Are Saying?
In a conversation with CoinDesk, many prominent cryptocurrency traders and experts revealed their essential ideas and forecasts on the market effect of the Shanghai upgrade.
Thomas Kralow, a cryptocurrency trader, believes that the Ethereum price may drop temporarily before and after the upgrade because daily liquidity will not be sufficient to absorb the influx of unstaked ether. The trader forecasts that the anticipated price decline wouldn’t amount to more than 15%-20% and that ETH should rebound fast.
Chief investment officer of digital-asset management company Arca, Jeff Dorman, has said that ETH is, in effect, a cryptocurrency index at this point. When asked whether he was concerned about a sell-off after the update released staked ETH, he said he wasn’t.
There may be pent-up demand from those who have been without liquidity for the last six months or so, but Dorman predicts that this will be more than offset by the influx of new speculators who didn’t bet the first time around due to a lack of available funds.
Umee’s CEO and co-founder Brent Xu anticipated some selling pressure after the Shanghai upgrade. He went on to say that this is a balancing act between the maturity of the proof-of-stake protocol and the degree to which its users are comfortable with and confident in its decentralization and transparency.
Time will tell how the Shanghai hard fork affects Ethereum’s price. Even while it is generally agreed that when tokens are released, investors will sell their cryptocurrency, this may not really occur.
Because of the high staking incentives for ether, some people may choose to keep their cryptocurrency locked in order to contribute to network validation while still earning a passive income.
When networks are updated, alternative cryptocurrencies often benefit. The move to proof of stake by ETH demonstrated this. However, if Shanghai fails to offer results that are in line with what the market is anticipating, a fall in ETH capitalization could be witnessed. But again, only time can tell.