The Shapella (Shanghai + Capella) upgrade successfully went live on epoch 194,048, block height 6209536 at 22:27 UTC on April 12, 2023.
Staked ETH can finally be withdrawn.
At the time of writing, a total of 79,608 (~$153M) ETH have been withdrawn, and 704,732 ETH is in the exit queue waiting to be withdrawn.
What now? Will ETH turbomoon or is the big dump incoming?
Everything you need to know about the Shanghai Upgrade in a nutshell.
How Did We Get Here
We covered the Shanghai Upgrade in a comprehensive analysis a few weeks ago. The main points were:
- Ethereum finally becoming a full proof-of-stake chain.
- We cannot say with certainty which stakers prefer to take profit or lock in a loss
- More upgrades are still to come.
The biggest question was whether the upgrade would be a "buy the news" or "sell the news" event. Even though the news was sort of pre-written already.
Trading whale GCR asked his audience on Twitter and opinions were nicely split down the middle:
The same goes for crypto analysts interviewed by CoinDesk. Sentiments ranged from:
... "clear sell the news” (Henry Elder, head of decentralized finance at Wave Digital Assets)...
...over "traders dump their ETH" (Laurent Kssis, crypto trading adviser at CEC Capital)...
...to "reasonable to expect an ether-bitcoin [ETH/BTC] rally in the weeks following the completion of the event" (Sean Farrell, head of digital asset strategy at FundStrat).
Glassnode published an on-chain analysis, saying that up to 170K ETH may be sold, although that is the highest possible estimate.
Basically, it is uncertain. Now, with the upgrade done and dusted, where do we stand?
How Ethereum Upgraded
At epoch 194,048, block height 6209536, Ethereum's Capella upgrade went live — enabling withdrawals from its PoS Beacon Chain.
Seems basic, but it's a big deal to the crypto industry.
The upgrade enables partial and full withdrawals, where validators can either withdraw all their stake or just the staking rewards accumulated. Full withdrawals retrieve all 32 ETH staked, although it is expected that most stakers with 32 ETH committed will continue securing the network.
Barnabas Busa, a DevOps Engineer at the Ethereum Foundation, told CoinDesk the first few epochs are likely not going to see any partial withdrawals.
According to CoinDesk, Vitalik Buterin thinks the "hardest and fastest parts "of the Ethereum transition are now over.
Ethereum is up slightly over the last 24 hours, posting a 2.8% rise in price, and climbing back above the $1,900 level.
However, the possible dump (or pump) of Ethereum is likely to play out over the coming weeks. So what catalysts is ETH looking at, and are they bullish or bearish?
Where Ethereum Could be Headed Next?
The next steps for Ethereum are already pre-drawn, with sharding as the next big upgrade. The next upgrade, labeled EIP-4844, will likely be a big proverbial fork in the road for the network, as it would set Ethereum on a path of significantly lower gas fees.
Vitalik Buterin told CoinDesk at a watch party:
"If we don't fix scaling before the next bull run, we know people are going to be stuck paying $500 transactions. If, on the other hand, we don't have Verkle Trees before the next bull run, well, things might suck, but you know, it's a much smaller problem than, you know, $500 transactions, right?"
Fixing gas prices will likely be a bullish catalyst for the long-term development of the Ethereum network. As for the price of Ethereum, it remains to be seen how the market sentiment will impact the fact that ETH can now be withdrawn.
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