The eagerly awaited Ethereum Shanghai upgrade is finally here, marking the end of the two-year transition to proof of stake. The upgrade will bring about technical improvements to the network, but what most Ethereum traders care about is staking withdrawals.
More than 18 million ETH, worth around $34 billion, has been locked up on the Ethereum network, and now set to become available to validators. This has made investors anxious about the possible effects on the price of the second-largest cryptocurrency by market cap.
According to Andrew Thurman, a data analyst at Nansen, the short-term impact on price may be less than expected. However, traders and investors are still on edge as they wait to see what will happen to the price of Ethereum in the aftermath of the Shanghai upgrade. Matthew Niemerg, co-founder of Aleph Zero, a privacy-enhancing blockchain network, believes that the possible effects of the upgrade are already priced in.
While some have speculated that the withdrawal queue will cause a massive sell-off in price, the number of requests allowed per day is limited, only allowing for a maximum of 115,200 requests. Guilhem Chaumont, CEO and co-founder of Flowdesk, explains that unstaking is unlikely to cause a sharp, sudden dip in the price of Ethereum.
There is no doubt that the Shanghai upgrade will be a game-changer for the Ethereum network. This upgrade marks the end of a years-long transition to proof of stake, which has the potential to attract more traders and investors to Ethereum.
However, Ethereum users need to be aware that they may have to wait weeks or months to retrieve their assets. This is because of the anticipated length of the withdrawal queue, which is expected to be long.
Individual stakers who were able to pony up at least 32 ETH, which is worth approximately $60,000 at today’s prices, can expect to wait at least two to three days to have withdrawal requests processed.
Ethereum developers have previously explained to Decrypt that those staking through pools and other service providers, such as Lido or crypto exchanges like Coinbase, may have to wait several weeks or even months to withdraw their funds.
Despite the wait times, the availability of liquid staking services like Lido means that traders who have wanted the ability to trade staked ETH have been able to do so even before the Shanghai upgrade. Jacob Cantele, head of product at Ethereum layer-2 Mantle, previously told Decrypt that most people have been able to sell staked ETH for quite some time.
In conclusion, while the Ethereum Shanghai upgrade is exciting news for traders and investors, the short-term effects on the price of Ethereum may be less pronounced than expected. Ethereum users who wish to withdraw their funds from the network should expect to experience long wait times. Nevertheless, this upgrade marks a significant milestone for Ethereum, which has the potential to attract more traders and investors to the network.