Explorer

Ethereum Shanghai Upgrade: How Did It Affect ETH Price? What It Means For Investors

The Shapella upgrade, also known as the Shanghai upgrade, represents the most substantial transformation for Ethereum since the ‘Merge’ last year.

On April 12, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, successfully completed the Shanghai upgrade. This event was highly anticipated throughout the crypto industry and has resulted in ETH price surpassing the $2,000 mark for the first time since May 2022. With this upgrade, users can now withdraw their ETH, which had been locked up for rewards.

What Is The Shanghai Upgrade? 

The Shapella upgrade, also known as the Shanghai upgrade, represents the most substantial transformation for Ethereum since the ‘Merge’ upgrade implemented last year, which revolutionized the blockchain's operational procedures.

Prior to the ‘Merge’ that occurred in the previous year, Ethereum depended on ‘miners’ who employed computers to tackle intricate mathematical problems to safeguard the blockchain by managing transactions. Before the Merge there was a significant amount of impact on the environment from these mining operations. The incredibly enormous consumption of energy, coupled with the carbon emissions, was a cause of concern.

ALSO READ: Why Bitcoin Is Seeing A Surge In 2023, What Investors Should Keep In Mind

Presently, the network is reliant on ‘validators’ who stake or immobilize their coins to authenticate new transactions. These validators are granted specific amounts of fresh coins, enabling them to earn passive income without disposing of their holdings.

The Ethereum Foundation has reported that the implementation of the 'Merge' has led to a reduction of over 99 per cent in Ethereum's energy consumption. However, a drawback was that coin holders who had staked their coins were unable to unlock them.

Ethereum Shanghai Upgrade: How Did It Affect ETH Price? What It Means For Investors

What Is The Importance Of The Shanghai Upgrade?

The significance of the Shanghai upgrade lies in the fact that it enables validators to withdraw their coins through two primary methods of unstaking: partial withdrawal and full withdrawal.

When stakers retrieve the rewards they have earned from staking but keep the initial ether staked, it is referred to as a partial withdrawal. Conversely, a full withdrawal occurs when stakers redeem their original principal and withdraw completely, enabling validators to completely unstake their accumulated ETH and rewards.

ALSO READ: Crypto Airdrop: What Is It? How It Can Help In Better Promotion Among Enthusiasts

Will Shanghai Upgrade Affect ETH Prices?

After the Shanghai Upgrade, we have seen a surge of positive momentum around the price of Ethereum. However, most cryptocurrencies are trading positively due to mildly encouraging US inflation data. Nonetheless, if the entire supply of staked ETH is withdrawn and sold, there may be increased volatility ahead. Nevertheless, regardless of whether or not there are any sell-offs, it is probable that Ethereum will experience long-term value growth as a result of its recent upgrades.

What Should Investors Keep In Mind?

Ethereum, being one of the top cryptocurrencies in the market, boasts a substantial market capitalization and an unlimited supply, setting it apart from Bitcoin. Its extensive utility and frequent updates, alongside a growing user base, make it a promising investment opportunity. Holding onto this crypto can yield fruitful outcomes. Nevertheless, conducting thorough research prior to entering the market is crucial for optimal results.

(The author is the CEO and co-founder of Mudrex, a global crypto investing company)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.

View More
Advertisement
Advertisement
25°C
New Delhi
Rain: 100mm
Humidity: 97%
Wind: WNW 47km/h
See Today's Weather
powered by
Accu Weather
Advertisement

Top Headlines

J&K CM Omar Says People Found Their Voice Through Special Status Resolution; BJP Threatens To Run ‘Parallel Govt’
J&K CM Omar Says People Found Their Voice Through Special Status Resolution; BJP Threatens To Run ‘Parallel Govt’
Maharashtra Polls: PM Modi’s 'Ek Hai, Toh Safe Hai' Remark After Adityanath's 'Batenge, Katenge' Slogan — WATCH
WATCH: PM Modi’s 'Ek Hai, Toh Safe Hai' Remark After Adityanath's 'Batenge, Katenge' Slogan
IND vs SA 1st T20I Live Score: Miller & Klaasen Revive South Africa's Innings But India Still On Top
IND vs SA 1st T20I Live Score: Miller & Klaasen Revive South Africa's Innings But India Still On Top
J&K: Bodies Of 2 Village Defence Guards Recovered In Kishtwar, Protests Erupt As Search For Terrorists Underway
J&K: Bodies Of 2 Village Defence Guards Recovered In Kishtwar, Protests Erupt As Search For Terrorists Underway
Advertisement
ABP Premium

Videos

Marshals Remove BJP Legislators from J&K Assembly Amidst Growing TensionsAnchor Silences NC Spokesperson Over Article 370 and 35A Debate | ABP NewsJ&K Assembly: Dramatic Images Show BJP and Ruling Party MLAs in Heated ScuffleClash in J&K Assembly: Cameras Capture Khursheed Ahmad Sheikh’s Scuffle with BJP MLAs

Photo Gallery

Embed widget