The Ethereum blockchain is set to undergo a major makeover, which will allow investors to access over $33 billion worth of Ether tokens. The new software upgrade, which is called Shapella, allows users to withdraw the Ether tokens they staked in the platform. Users locked up these coins on the blockchain for the last three years so they could accumulate interest.
1.1 Million Tokens Ready For Withdrawal After Upgrade
The staked Ether tokens, which is valued at over $33 billion, makes up almost 15 percent of the total Ether supply. In the week following the upgrade, about 1.1 million Ether will be available for withdrawals. Based on the current value of $1,860, these tokens are worth about $2 billion.
As of now, crypto traders are wondering how this sudden influx of Ether in the crypto market will affect prices. But according to the chief strategy offer at the Bitrue crypto exchange, Robert Quartly-Janeiro, it’s not easy to determine whether the upgrade will impact prices.
Expect Short-Term Volatility, Says Bitrue Exec
The only thing he knows for sure is that the Shanghai hard form will lead to short-term volatility. Nevertheless, some groups in the market are worried that unlocking the staked coins could lead to a massive sell-off. This, in turn, could push down prices even further.
However, Bundeep Rangar, the CEO of Fineqia International, disagrees with the notion of a widespread selling wave.
The chief executive officer of the blockchain investment firm explained that only 29 percent of staked either would be sold at a profit. Therefore, most of the users would be selling their tokens at a loss.
The Wait Is Finally Over
Once the Shapella upgrade rolls out, it would be the end of a three-year wait for investors who chose to deposit their tokens. The staking project started in 2020, when users decided to stake their Ether in return for a yield.
The developers behind the Ethereum blockchain got the ball rolling after launching ‘the Merge’ upgrade last year. It was an innovative project that swapped energy-intensive mining for a proof-of-stake system.
According to this model, Ether owners would lock up 32 coins and check new additions to the blockchain. This would allow them to earn more tokens on top of their staked coins.
Up until now, investors who wanted to stake their Ether tokens had to make a deposit of at least 32 coins. That’s worth about $59,520 now, and they’d have to stake it indefinitely, which would be out of reach for the average investor.
In a statement, the CEO of CoinRoutes explained that many people chose not to stake their Ether before the Shanghai upgrade. After all, once they would do that, it would be locked indefinitely.