The COVID-19-induced quantitative easing across global markets was in full swing by the end of 2020 and early 2021, resulting in a nearly year-long mega-bull run. During this time, the price of Ether climbed over tenfold, reaching a high of more than $4,800.
Following the end of the euphoric bullish phase, a difficult cool-down period was aggravated by the UST-LUNA crash, which occurred in early 2022. This reduced Ether’s price to $800. In the third quarter, the market saw a good rebound led by the Ethereum Merge story, which provided a ray of hope.
The transition to an eco-friendly proof-of-stake (PoS) consensus process was a significant step forward. The event also lowered post-merge Ether inflation. ETH peaked at more than $2,000 in the run-up to the Merge on September 15, 2021. The positive momentum, however, evaporated rapidly, turning the Merge into a buy-the-rumour, sell-the-news event.
A similar positive opportunity may emerge in Ether as the impending Shanghai upgrade, scheduled for March 2023, draws market attention. The upgrade will allow withdrawals from Ethereum staking contracts, which are now locked. The improvement will significantly lower the danger of ETH staking.
Shanghai Upgrade of ETH Network:
The Shanghai improvement to the Ethereum network will center on facilitating user withdrawals of Ether (ETH). This upgrade, slated to be live in March, will allow users to access currencies staked on the network as part of the September switch to proof-of-stake consensus.
The engineers intend to offer a public test network for the Shanghai upgrade by the end of February to fulfill the March deadline. During recent core developers call, it was decided not to include the Ethereum Virtual Machine Object Format (EOF) in the upgrade due to worries that it would cause the deployment to be delayed. The Shanghai upgrade prioritizes ensuring the smooth implementation of the withdrawals feature.
Some are anticipating rivalry between LSD and the Shanghai update of the Ethereum network, which is expected in March 2023. (Liquid Staking Derivatives).
What Is Expected of this Upgrade?
With the Shanghai update of ETH network, following are expected by the users:
- Major investors and others looking to liquidate their holdings could increase the market’s selling pressure.
- Users who have not yet staked their ETH will move it to Liquid Staking Derivatives (LSDs). Investors may transfer their newly unstaked Ethereum to Liquid Staking Derivatives (LSDs) to take advantage of higher returns and more decentralized financial features. This may inspire creative solutions and innovative ways of using the area.
- Another possibility is that staking behavior will remain unchanged, and players will not destake.
What are your views on this?