Ether ETH price surges above $2.1K to further fuel post-Ethereum Shanghai upgrade surge

Good morning Here’s what happens:

Prices: Ether surged a day after Ethereum Shanghai upgrade; Bitcoin also surged towards $31,000.

Takeaways: The mass unlock of staked ETH predicted by some crypto market watchers has not materialized. Ether price surged, prospects for Ethereum and liquid staking derivatives are encouraging.

Ether Surges Above $2.1K; Bitcoin nears $31,000

Crypto market watchers expect post-Shabella selling pressure to propel Ether’s price drop through a day of disappointment.

The second-biggest cryptocurrency by market cap started rising steadily just before the US stock markets opened, only faltering after ETH’s price surged above $2,000 for the first time since last August. Ether recently traded above $2,100, up more than 11% in the past 24 hours, as investors embraced the prospect of additional liquidity while earning rewards for wagering rather than a desire to take profits and run away immediately .

“Many traders had been waiting for the end of the upgrade to start building long positions,” Ilya Volkov, CEO and co-founder of crypto trading services provider YouHodler, wrote to CoinDesk in an email. “Therefore, neutral news on US inflation plus lagging demand has propelled ETH price higher.”

Volkov noted that unless current macroeconomic conditions worsen, Ether is unlikely to deviate from a price rally that began with other major cryptos earlier in the year, even if selling pressure mounts in the weeks that follow. “Basically, ETH price has remained in the same uptrend channel since the beginning of the year,” he wrote.

Shapella, also known as the Ethereum Shanghai Upgrade, is the final stage in the Ethereum network’s transition from a Proof-of-Work (PoW) to a more energy-efficient Proof-of-Stake (PoS) protocol. Crypto market watchers were divided on the impact, with some predicting a price bounce while others expected little change.

Bitcoin also continued its more moderate momentum, recently moving towards $31,000, up more than 2.5% from the same time Monday. Other major cryptos spent much of Thursday in the green, with ARB, the token on Layer 2 blockchain Arbitrum, recently surging about 33%, and APT, the native crypto on Layer 1 blockchain Aptos, which increased by about 12%. The CoinDesk Index, a measure of how crypto markets are performing, rose nearly 5% recently.

Stocks closed higher, with the technology-focused Nasdaq and the S&P 500, which has a large technology component, up 2% and 1.3%, respectively. A number of crypto-related stocks continued their recent rally, with miners Marathon Digital and Hut 8 Mining each up about 15%. Recession-feared investors also continued to show their appetite for other assets holding their value, propelling gold above $2,050, close to its all-time high of $2,069 set in 2020.

Will Ether keep going up? CoinDesk analyst Glenn Williams suggested that ETH deposits would provide some signals for the way forward. Since January 2021, the trend of Ether deposited into ETH staking contracts has been steadily increasing, a direction that suggests the asset is gaining favor, not losing it,” Williams wrote begin. But for those looking to invest, Shapella’s closing signals reduced risk, increased liquidity and an increase in asset value.”

Why didn’t you sell the news of Ethereum’s Shanghai upgrade?

Looking at the numbers, many Ether (ETH) stackers seem to have decided to hold on to their coins. Although several analysts predicted that the just-completed Ethereum Shanghai hard fork (along with the separate Capella upgrade, collectively known as “Shapella”) would be a sell-the-news moment, ETH has actually surged to an eight-month high. The second-largest crypto by market cap traded above $2,000 for the first time since last summer after gaining ~3% during Asian trading hours.

This article is an excerpt from The Node, CoinDesk’s daily roundup of the top stories in blockchain and crypto news. You can subscribe to the complete newsletter here.

What this says about the viability of Ethereum and the prospects for the price of ETH is an open question. Shanghai, the backwards-compatible hard fork, has given Ethereum stakers the ability to withdraw tokens they pledged to the Ethereum deposit contract used to validate the Proof-of-Stake network, as well as the token payments they made for it have received. Many stakers initially pledged 32 ETH to become validators in 2020 and haven’t had any real access to their coins since.

So the current 18+ million ETH (worth about $33 billion) hasn’t resulted in a flurry of selling. Faithful CoinDesk readers probably knew that the “selling pressure” on ETH was overdone. As Amphibian Capital CEO James Hodges wrote on Monday, the vast majority of ETH validators were in the red leading up to the event, making it unlikely they would cash out at a loss. Now that crypto prices are rising, led in particular by Bitcoin, which broke through the crucial $30,000 mark this week, fortunes could be about to reverse.

Read the whole story here:

Ethereum’s Shanghai upgrade is complete and the network is now processing stake withdrawals. Justin Florentine, Senior Protocol Engineer at Ethereum client Besu, joins “First Mover” to discuss “Shapella”, as the upgrade is also known. Internet giants and their metaverse movements are also a concern for some regulators. Sebastien Borget, co-founder and COO of The Sandbox, contributed to the discussion. Also, the latest in the FTX bust case and a closer look at the crypto scene in South Korea.

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