- ETH has soared over 6% since implementing the Shanghai update on Wednesday, trading at $2,121.
- Staking pools and exchanges roll out directives to guide users on how and when to expect their rewards locked in their platforms.
- The update brings more liquidity to investment, an attractive requirement for conservative institutional investors who need unrestricted access to their funds.
Top digital assets continue their blistering run this year as they recover sharp losses recorded from the unfortunate events of last year.
Ethereum (ETH) recorded a sharp gain barely 24 hours after implementing the Shanghai upgrade. The market-leading altcoin is up by 14% this week, currently exchanging hands at $2,121 at press time and looks on course to break $2,500 if the good tide continues.
Minutes after the Shanghai update went live, ETH traded steadily with slight gains amidst widespread fears that a similar post-Merge loss would occur. The update, which allows users to withdraw their staked asset from the platform, could lead to a slight dip in price, as some predicted. This is due to the fact that users will want to take out their assets that have been locked in since Sept 2022.
The performance of ETH in the market so far is better than the previous merge upgrade, although users now have access to over 18 million ETH staked on the network. Despite the huge milestone recorded by the Merge, ETH dipped by 8% hours after it went live and struggled to recover.
ETH is now on course to tap a new pricing milestone not seen since Aug 15 last year as it nears $2,500. Market leader Bitcoin (BTC) broke through $30,000 after eight months with similar gains from other top 10 assets.
More institutional money in ETH
Before the Shanghai upgrade, some investors were sceptical of locking away assets in the form of staking, but as users now have access to over $35 billion worth of staked assets, conservative investors now looked poised to join the moving train. Diogo Monica, the co-founder of Anchorage Digital, said that lack of liquidity scared investors away, but that is now in the past.
“I expect a flip to happen: the large majority of these institutions will stake, and very few of them are going to have unstaked Ethereum,” he added.
Lachlan Feeney, the CEO of Labrys, an Australian digital asset consultancy firm, also reiterated Monica’s comments saying that the update has removed the risk involved.
“Previously, institutional investors would likely have been reluctant to lock their assets without the option to withdraw. Now that such an option exists, it de-risks their investment, removing the deterrent that previously existed.”