Last week’s first-ever enabling of crypto withdrawals from the Ethereum blockchain’s staking mechanism has ignited a fresh wave of enthusiasm for Ether (ETH) among traders and investors. The long-awaited Shanghai upgrade, which was widely speculated to either crash or rally the ETH price, has proven to be a catalyst for growth and investor interest, sending the price soaring past $2,000.
Since then, the price of Ether has continued to climb, gaining on four of the past five days and hitting an 11-month high on Sunday, reaching $2,141. This puts the ETH price up 77% year-to-date, and it is catching up fast to Bitcoin (BTC), which has gained 83% in 2023.
According to Sean Farrell, the head of digital asset strategy at FundStrat, “the market’s pessimism regarding Ethereum staking withdrawals proved excessive.” This sentiment reflects the general consensus among analysts and traders that the success of the upgrade could lead to a surge in growth and investor interest.
The ability to withdraw crypto from the Ethereum blockchain’s staking mechanism is a significant development for the ecosystem. Staking is a process by which users can lock up their ETH to support the network’s operations and earn rewards in return. However, until now, staked ETH was illiquid, meaning it could not be traded or withdrawn, limiting its usefulness.
The ability to withdraw staked ETH will make it more attractive to investors, as it will increase liquidity and allow them to use their assets for other purposes. This is expected to drive demand for ETH and could potentially lead to a significant increase in its price.
Overall, the success of the Shanghai upgrade and the ability to withdraw staked ETH have reinvigorated investor interest in Ethereum, which has been steadily gaining ground on Bitcoin in recent months. With the Ethereum 2.0 upgrade on the horizon, which will introduce proof-of-stake consensus and improve the network’s scalability, it is no surprise that the ETH price is expected to continue its upward trajectory.