Glassnode Predicts Minimal Impact of Shanghai Upgrade on ETH
The long-awaited Shanghai/Capella hard fork is set to occur on April 12, 2023, allowing staked ETH to be withdrawn. This upgrade has caused some concern in the Ethereum community, with fears that the release of a large amount of staked ETH could cause a temporary drop in the value of ETH. However, according to Glassnode, only around 100,000 ETH ($190M) of the total collected prizes are expected to be sold, with only around 75,000 ETH ($133M) becoming liquid.
The highly anticipated Shanghai/Capella hard fork is scheduled to take place on 12-April-2023, enabling the withdrawal of staked #Ethereum.
In this extended edition of the Week On-Chain, we shall evaluate the overall Ethereum staking landscape, develop a framework to establish… pic.twitter.com/EVgsz3s6GG
— glassnode (@glassnode) April 11, 2023
Glassnode Analysis Indicates Normal Exchange Inflow Range for Sell-Side Volume
Glassnode’s analysis suggests that the sell-side volume is still within the range of the normal weekly exchange inflow volume, even if the full quantity of incentives and stake are pulled and sold. This indicates that even the worst-case scenario will have little effect on the value of ETH.
Trending Now:Â OKX to Temporarily Halt Operations to Prep for Shanghai Update
Stakeholders who have been around since the beginning of the Beacon Chain’s existence have seen their rewards grow over the course of more than two years and a full bull or bear markets cycle. There has been a lot of talk about the market and supply effects of unlocking the roughly 18 million ETH staked. However, the actual impact on the market is expected to be relatively small.
Shanghai/Capella Hard Fork Expected to Have Little Impact on Value of ETH
Glassnode’s research analyzes the potential for quick withdrawal and sale of staked ETH following the Shanghai upgrade. They estimate that only 170,000 ETH will be sold. This is due to the fact that only a fraction of the rewards will be distributed, even if twice as many validators leave each day.
The Ethereum community can breathe a sigh of relief as the hard fork is expected to have little impact on the value of ETH. The sell-side volume is still within the range of the normal weekly exchange inflow volume, and only a small fraction of the total staked ETH is expected to be sold. Overall, the Shanghai upgrade is an exciting development for the Ethereum ecosystem. It is expected to have a positive impact in the long term.
