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Although it may exert some short-term downward pressure on the price of Ether (ETH), the forthcoming Shanghai upgrade is expected to be very positive for Ethereum’s native token, as it will draw more investment into staking and enhance the network’s security, according to Ethereum researcher Vivek Raman.
The Shanghai upgrade, set for April 12, will enable network validators to withdraw funds that have been secured since December 2020. This upgrade will finalize the network’s shift to a proof-of-stake model, which began in October 2022 with the Merge.
Approximately 18 million ETH will be accessible for withdrawal after the Shanghai upgrade. Raman notes that this could create some selling pressure on ETH’s price in the short term.
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Nonetheless, in the long term, the option to unstake Ether will significantly reduce the risk associated with ETH investments, he emphasized. Specifically, institutional investors who were previously hesitant to participate in staking will likely feel more at ease once ETH can be unstaked. An influx of capital into ETH staking will benefit the Ethereum network over time.
“The greater the amount of native proof-of-stake assets that are staked, the higher the expense to compromise the chain,” Raman highlighted.
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