This week was one of the most important for the second largest cryptocurrency. What happened? “Shapella” was implemented. What is this?
It’s basically an upgrade to the network that allows people to withdraw their money, deposit it, and earn rewards. This process is known as “staking” and is similar to a fixed term in cryptocurrencies.
This new update marks an important moment for Ethereum as it completes the transition to a different validation system called proof-of-stake from the previous one, proof-of-work.
Why was there fear of a sharp drop in price?
Like now Ethers can be withdrawn after staking, the fear was that people would withdraw them and sell them. There was (and still is) a potentially large supply of Ethers that could be sold.
And what happened? Let’s see
etherthe cryptocurrency of the Ethereum networkwas able to exceed USD 2,000, a level not reached since August 2022.
Clearly, the technological improvement weighed more, which was a success and was carried out in record time. In addition, there are many investors who joined the network.
Now, Ethereum, as a project, is much more solidsince everything was implemented as planned and successfully.
Is it a good idea to invest now?
Focusing solely on the price, we can conclude that Ethereum has been in a clear upward trend for several months.
But we cannot forget the following. After this update, there are more than 3.3 million Ethers that could be withdrawn and sold in the next 50 days. Is it going to happen? We do not know. The good thing is that blockchain technology allows us to monitor in real time.
Clearly, if a good part of the people who deposited their Ethers go out to sell them, the price will tend to fall in the short term. But there may also be a situation in which they decide to reinvest instead of selling.
As always, and more in cryptocurrencies, it is advisable to follow what the prices say. Therefore, we must be very attentive to the coming days. Surely there is no lack of volatility.
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Note: The material contained in this note should in no way be construed as investment advice or a recommendation to buy or sell any particular asset. This content is for educational purposes only and represents the author’s opinion only. In all cases it is advisable to consult a professional before investing.