Mediaboss Marketing

Ethereum (ETH 4.96%) is up 60% for the year, and all eyes are now on the blockchain's pending Shanghai upgrade. This is the first major upgrade to Ethereum since The Merge, and has been highly anticipated for months.

The Ethereum bulls, of course, think that Shanghai will be a huge win for Ethereum, and are getting ready for a huge rally. Some are even predicting a $10,000 price for Ethereum by 2025. But just how realistic is that target? After all, the record high for Ethereum ($4,891.70) is less than half that level.

Both bulls and bears agree that the Shanghai upgrade is pivotal to what happens next with Ethereum.The upgrade is directly related to Ethereum's transformation from a proof-of-work blockchain into a proof-of-stake blockchain last year. As soon as that change took place, Ethereum had to consider the implications for staking, which is the process of locking up crypto on the blockchain in exchange for rewards.

Currently, the lockup period for Ethereum is indefinite. You can stake your Ethereum and earn rewards, but you cannot unlock it and take it out of the blockchain. The primary purpose of Shanghai is to make it possible to withdraw this staked Ethereum, some of which has been locked up since December 2020.

Image source: Getty Images.

According to the Ethereum bulls, the Shanghai upgrade is going to result in huge new flows of capital coming into the blockchain. That's because Shanghai will de-risk staking on the blockchain and pave the way for more individual investors to get involved. If you look at how much Ethereum has been staked, it is only about 16% of the crypto's entire market cap, compared to levels of 60% to 70% found on other blockchains. So it does make sense that the Ethereum staking ratio will one day align with the percentages found on other proof-of-stake blockchains because investors no longer will face an indeterminate lockup.

However, that's over the long term. In the short term, the upgrade could spur a huge retreat from Ethereum as investor who have been locked up take flight. This could lead to a huge price dump. Nearly 1 million Ethereum tokens will be available for immediate unstaking in April, and this means that nearly $2 billion worth of Ethereum could be dumped on the market. That doesn't even take into account what happens to the other 18 million Ethereum tokens (worth an aggregate of $36 billion) that have been staked.

What many investors don't realize is that Ethereum's digital transformation is really only halfway to completion. It did not end with The Merge. Vitalik Buterin, co-founder of Ethereum, originally promised 100,000 transactions per second. And he also promised that Ethereum gas, or user, fees would decline markedly after The Merge, making the blockchain much more attractive. But what's the reality? Ethereum still has a transaction processing speed of less than 50 transactions per second, which is glacially slow. And gas fees are not much improved, either.

So, it could take until 2025 before Ethereum reaches higher functionality. In November 2022, Buterin published an updated roadmap, and the future development of the blockchain consists of at least five more stages. Given how long it took to implement The Merge, and how many delays there were along the way, this could be a very long process.

Ultimately, these delays and accompanying uncertainty could have a negative impact on the price of Ethereum. Investors are going to get tired of waiting, and when people finally realize that Ethereum still relies heavily on Layer 2 scaling solutions by other cryptos even after The Merge, there could be a move to embrace other blockchain solutions that don't come with Ethereum's legacy proof-of-work problems.

That said, I'm still bullish on Ethereum for the long haul. But not so much in the short term. It will take time to deal with the ramifications of Shanghai, especially if there is a short-term price dump. Any price volatility could panic investors if it lasts too long. And it will take time to push through all the really big blockchain innovations that are the keys to Ethereum ultimately boosting its transaction processing rate and lowering its transaction fees.

A more realistic price target, in my opinion, is $3,000. Ethereum last hit this price a year ago in April 2022. Based on today's prices, that represents a gain of more than 50%. If and when Ethereum ever hits that target, that's when investors can have a discussion about a $10,000 price target.

Read more here:

Just How Realistic Is an Ethereum Price Target of $10,000? - The Motley Fool

The Shapella hard fork has officially been executed on the Ethereum mainnet meaning that Ethereum validators can finally withdraw their staked Ether (ETH) from the Beacon Chain.

The long-awaited upgrade took effect at 10:27 pm UTC on April 12 at epoch number 194,048.

Within the first hour of the hard fork, a total of 12,859 Ether were unlocked in 4,333 withdrawals, according to Ethereum block explorer beaconchai.in.

Currently, around 44% of validators, or 248,043 of the total active 559,549, can request a partial or full withdrawal.

The majority of withdrawals at this time range between 2.8 to 3.2 ETH, which suggests that its mostly staking rewards that are being withdrawn at this time.

The withdrawals come as only 3,996 validators signed up to the exit queue moments before the Shapella hard fork took effect, according to data from Rated Network Explorer.

Of the total amount of withdrawable Ether, crypto exchange Huobi holds the largest share at 30%, followed by the decentralized autonomous organization PieDAO at 17.7%,according to data from blockchain analytics firm Nansen.

A total of 284,622 Ether is awaiting a full withdrawal from 7,948 validators, Nansen data shows.

The price of Ether, currently $1,920, has barely moved within the first hour of the hard fork something which was predicted in an April 11 report from blockchain intelligence platform Glassnode.

The hard fork can theoretically unlock 18.1 million Ether on the Beacon Chain currently equating to over $34.8 billion, however, several mechanisms are in place to prevent a flood of ETH from hitting the market,according to the Ethereum Foundation.

Related: Less than 1% of staked ETH estimated to sell after Shanghai upgrade: Glassnode

In its report, Glassnode estimated that less than 1% of that total would be released over the first week and the 12,859 Ether unlocked within the first hour only represents 0.07% of the total Ether staked in the Beacon Chain.

Through Ethereum Investment Proposal EIP-4895, staked Ether was pushed from the Beacon Chain to the Ethereum Virtual Machine (EVM) otherwise known as the execution layer, making withdrawals possible.

It is the most significant upgrade since the Merge on Sept. 15 and it moves Ethereum one step closer towards a fully functional proof-of-stake system.

Magazine: Account abstraction supercharges Ethereum wallets: Dummies guide

Update (April 12, 11:52 pm UTC): This article has been updated to include Ethereum validator withdrawal figures immediately following the Shapella hard fork.

Update (April 13, 12:20 am UTC): This article has been updated with further information, metrics and background information.

Read the rest here:

Ethereums Shapella hard fork executed on mainnet - Cointelegraph

LONDON, April 13 (Reuters) - Cryptocurrency investors are facing delays to withdraw funds deposited on the Ethereum blockchain after its major software upgrade, highlighting persistent headaches for Ethereum which aims to have the technology widely used for instant payments.

The software upgrade, known as "Shapella," was set to unlock more than $30 billion worth of ether , the second-biggest cryptocurrency, which investors had deposited on the Ethereum blockchain in return for interest.

Ether rose above $2,000 for the first time since August 2022 on Thursday .

Until Wednesday's upgrade, investors could not withdraw funds they had deposited via this method, known as "staking", on the Ethereum blockchain.

As of Thursday, ether worth around $1.4 billion was stuck in a withdrawal queue, blockchain data firm Nansen said.

The delays are an example of the limits in the transactions that Ethereum can process, highlighting its potential shortcomings as it strives to become a widely-used financial infrastructure.

The Ethereum Foundation, a body that speaks for the network and describes itself as a "non-profit organisation dedicated to supporting Ethereum", did not comment.

The delays are due to limits in the amount of transactions the blockchain can process, Nansen analyst Martin Lee told Reuters via email. It can process approximately 1,800 validator withdrawals, or 57,600 ether worth of exits per day, he said - that's approximately $115 million.

The limits on validator withdrawals were in place for security reasons, Lee said.

"In an extreme scenario, if theres no limits, and a large majority of validators exit, the Ethereum network would be vulnerable to attacks and bad actors," he said.

Ethereum has grown popular for offshoots of the crypto market such as so-called decentralised finance or NFTs, but it has yet to become used in mainstream payments, finance or commerce.

The major Binance exchange said users would be able to withdraw their ether from its staking product from April 19, and that it may take "15 days to several weeks" to process these transactions.

"Due to the processing limitations on the Ethereum network, Binance will set a daily ETH redemption quota for each Binance user," Binance said on its website.

Nansen's Lee said the backlog will likely take weeks to clear, after which depending on what the average daily "unstaking" amount is, it would take just hours or a couple of days.

Reporting by Elizabeth Howcroft, editing by Tom Wilson and Emelia Sithole-Matarise

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Reports on the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds and the money driving "Web3".

Read this article:

Crypto investors face delays in withdrawing funds after Ethereum upgrade - Reuters

The price of Bitcoin has risen 1% over the past 24 hours to near $30,250, with the largest digital asset trading around its highest level since last June after breaking through the key $30,000 level late Monday. The $30,000 level is psychologically important because it represents where Bitcoin stood last summer before a string of business failures across the crypto industry turned a selloff into a brutal bear market.

Bitcoin is consolidating around the $30,000 mark for the third day, moving in a tight $20,700 to $30,300 range, said Alex Kuptsikevich, an analyst at broker FxPro. The $30,000 mark was significant for Bitcoin in 2021 and the first half of 2022, acting as a market mode switch. Last year, Bitcoin consolidated around this price for about five weeks before plunging sharply. There is a greater chance of a mirror dynamic, with the bulls taking a long time to gather their strength before making a decisive move higher.

Bitcoin is likely to continue reacting to macroeconomic forces that also impact the stock market, and swing in step with the Dow Jones Industrial Average and S&P 500.

In focus are the future of interest rates and Federal Reserve monetary policy. Decades-high inflation pushed the Fed to dramatically tighten financial conditions last yeara major headwind for socks and cryptos alikebut the 2023 surge in cryptos has come amid expectations that the central bank will be more accommodative. Economic data due this week will be important in shaping the narrative.

Advertisement - Scroll to Continue

More immediately, crypto traders are focused on Ether after the Ethereum blockchain network completed its critical Shanghai upgrade late Wednesday. Ether prices were outperforming, up 6% over the past 24 hours and nearing the $2,000 mark.

Shanghai is the biggest change to the Ethereum ecosystem since last years Merge, which transformed the network from a Bitcoin-style energy-intensive proof of work system to proof of stake. Under proof of stake, participating holders of Ether lock up their tokens as collateral while they validate transactions and secure the network, earning interest in the process.

The Shanghai upgrade allows those tokens to begin to be withdrawn, raising the prospect of selling pressure as some investors withdraw staked Ether and sell it. But the Shanghai upgrade, which will make staking more straightforward, is also expected to make the trade more popular, which should support prices. For now, selling pressure appears to be muted after the successful upgrade.

Beyond Bitcoin and Ether, smaller cryptos or altcoins were also higher, with Cardano and Polygon each climbing 4%. Memecoins were also buoyant, with Dogecoin up 4% and Shiba Inu

Advertisement - Scroll to Continue

Write to Jack Denton at jack.denton@barrons.com

The rest is here:

Bitcoin Price Hits a 10-Month High. Ethereum's Upgrade Is a Hit. - Barron's

April 12 (Reuters) - The software that underpins the second-biggest crypto coin ether was upgraded on Wednesday and is online, cryptocurrency exchange Binance said in a tweet.

The move will give investors access to more than $30 billion of the digital tokens.

Known as Shapella, the latest upgrade to the Ethereum blockchain since its Merge upgrade will enable investors to redeem an offshoot of ether tokens that they have deposited in return for interest on the blockchain network over the past three years.

Such so-called "staked ether" tokens currently account for about 15% of all ether tokens, according to data firm Dune Analytics, and are worth some $31 billion.

"The Shanghai/Shapella Upgrade is complete. Deposits & withdrawals for ETH, OP, ARB and ERC-20 tokens via the Ethereum, Optimism, and Arbitrum networks are now back online," Binance said in a tweet.

The changes will likely lead to heightened volatility for ether, investors have predicted.

Some believe that widespread redemptions could lead to a wave of selling, in turn weighing on the price of ether, whose market value of about $230 billion is topped only by bitcoin.

"The release of this previously unrealised investment may lead to significant downward price pressure if it is immediately liquidated," Deutsche Bank analysts said in a note.

In its last significant upgrade, Ethereum in September drastically reduced its energy usage - a move proponents said would give Ethereum an advantage as it seeks to surpass bitcoin.

But ether has continued to lag its larger rival, gaining just under 60% this year versus a more than 80% jump for bitcoin.

After trillions of dollars were wiped from the crypto market in a bruising 2022, the sector has rallied in 2023 on expectations that central bank interest rate hikes are slowing.

Ethereum has grown popular in so-called decentralised finance applications, which offer financial services while avoiding traditional industry gatekeepers such as banks.

It remains, however, little used in mainstream commerce or finance.

Reporting by Tom Wilson in London and Shivani Tanna in Bengaluru; editing by Jason Neely and Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Thomson Reuters

Tom covers crypto companies, regulation and markets from London, focusing through 2022 on the Binance crypto exchange. He has worked at Reuters since 2014, with a previous posting to Tokyo where he uncovered abuses in Japans immigration system and won a joint Overseas Press Club award for reporting on the tobacco giant Philip Morris.

View post:

Ethereum's first major upgrade since Merge is complete- Binance - Reuters