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Going by the numbers, it seems like many ether (ETH) stakers have decided to hold onto their coins. Although several analysts predicted the just-completed Ethereum Shanghai hard fork (along with the separate Capella upgrade, together known as Shapella) would be a sell-the-news moment, ETH has actually climbed to eight-month highs. The second-largest crypto by market capitalization was trading above $2,000 for the first time since last summer, after gaining ~3% during trading hours in Asia.

What this says about the viability of Ethereum, and the outlook for the price of ETH, is an open question. Shanghai, the backwards-compatible hard fork, unlocked the ability for Ethereum stakers 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 received for doing so. Many stakers initially pledged 32 ETH to become validators in 2020, and havent really had access to their coins since.

This article is excerpted fromThe Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the fullnewsletter here.

So the 18 million-plus ETH currently staked (worth about $33 billion) has not led to a torrent of sales. Loyal CoinDesk readers likely knew the selling pressure on ETH was overstated. 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 theyd cash out at a loss. Now that crypto prices are rising, led in particular by bitcoin, which broke the important $30,000 psychological threshold this week, fortunes may reverse.

Whats most interesting for many is not how ETH tokens trade, but their synthetic counterparts known as liquid staking derivatives. These LSDs, as theyre often called (not to be confused with the entheogen) are essentially bearer instruments for staked ETH that allow users to trade an ETH proxy while still earning staking rewards. The biggest offerings from Lido, Rocket Pool, Frax and Stakewise all hit the market relatively recently. The question post-Shanghai is what role these assets will play.

LSDs still have tremendous value by allowing users to essentially double their holdings, for a fee. Put up ETH in a non-custodial platform and its still yours, along with a shiny new stETH or rETH or Coinbases cbETH. This makes these assets critical for creating and maintaining ETH liquidity (as well as part of the validation process). However, actual ETH has generally traded above the price of particular LSDs, in a similar way that you often see price discrepancy between a managed investment trust and its underlying assets (due to increased risk and fees).

The Shanghai update shows that Ethereum developers are continuing to successfully build out a network in real-time. Basic infrastructure is still being built on the main network, leaving opportunities for free-market alternatives to spring up in the wake. Initially allowing ETH stakers to participate in decentralized finance (DeFi), the total value locked in LSDs actually surpassed decentralized lending last month. The whole pie seems to be growing, which is good news.

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Why Didnt You Sell the News of Ethereums Shanghai Upgrade? - CoinDesk

'Coin Stories' podcast host Natalie Brunell joined The Big Money Show to discuss cryptocurrency as the price of bitcoin exceeds $30,000 for the first time since June of 2022.

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.

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

Ethereum faces withdrawal shortcomings, exposing potential weaknesses. (iStock / iStock)

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

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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, did not immediately 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.

Smartphone with displayed Binance logo and representation of cryptocurrencies are placed on keyboard in this illustration taken. (Reuters/Dado Ruvic/Illustration / Reuters Photos)

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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.

Photo illustration of Bitfinex cryptocurrency exchange website. (Reuters/Dado Ruvic/Illustration / Reuters Photos)

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.

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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.

Pastel Network co-founder and Innovating Capital General Partner Anthony Georgiades discusses his outlook for bitcoin and the failure of FTX.

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Crypto investors face delays in withdrawing funds after Ethereum upgrade - Fox Business

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.

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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.

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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.

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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".

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