Shapella upgrade to Ethereum could generate billions of dollars in selling pressure

You may have noticed that Ethereum moved from proof-of-work to proof-of-stake in September 2022. Since then, however, attackers have still not been able to score their ethers. At the time of writing, there are over 18 million Ethers tied to the Proof-of-Stake contract, but that is about to change.

The long awaited Shapella update

Scheduled for April 12. From this point on, if all goes according to plan, it is possible to release part of your Ethereum from the staking contract. On the one hand, this is a positive development for the platform, as it is of course important for attackers to have the ability to exchange and sell their Ethereum whenever they see fit.

On the other hand, the potential creates tremendous selling pressure on the price. It is still not possible to release all your ethers from the start, but all 1.1 million ethereum you have received so far as a reward for betting can be sold.

At the current price of around $1,900 for Ethereum, this creates a potential $2 billion selling pressure on the price. Of course, that doesn’t mean everyone starts selling right away, but it’s definitely a point to remember.

After all, people have been waiting for this moment for a long time, so it’s quite possible that one of the attackers is making a sale. Especially since prices have risen sharply in recent months and some may want to take advantage of that.

limited effect

Current policy is that partial proof-of-stake redemptions take approximately 5-6 days to complete. People who want to withdraw their entire balance will have to wait 3 weeks to 4 months for Ethereum.

In this sense, the protocol is designed in such a way that it is not possible to flood the market with short-term offers. Because of this, there is a good chance that the market will absorb the selling pressure because it is evenly distributed over a longer period of time.

“Thanks to the modest daily limit of 16.27 million ether originally included in the contract, the selling pressure is spread evenly over a longer period of time. This should allow buyers to meet selling pressure without too much impact on price,” said Max Eberhardt, crypto analyst at Saxo Bank, of the Shapella update.

Source: Btc Direct

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