On Thursday (26 January 2023), crypto analyst Jack Niewold, who is Founder of Crypto Pragmatist, shared his thoughts on Ethereum’s upcoming Shanghai hard fork, which will enable staking withdrawals.

According to a report by The Block, at Ethereum Core Devs Meeting #151, which was held on 8 December 2022, a provisional timeline for the completion of the Shanghai upgrade, also known as Ethereum Improvement Proposal (EIP) 4895, was set.

This upgrade will enable users to withdraw their staked funds from the Ethereum blockchain, a feature that is currently not available. According to Cointelegraph, “developers will aim for May or June 2023 to launch the Ethereum Improvement Protocol (EIP) 4844 upgrade that will introduce proto-danksharding to the network.”

In a Twitter thread posted yesterday, Niewold wrote:

Ethereum’s proof-of-stake chain is called the Beacon Chain, and while it has accepted deposits and paid out yields for years, stakers have never been able to withdraw their ETH. In March this changes, and it will have huge impact on Ethereum.

The Shanghai/Capella fork will likely go live next month, and one of the things it does is enable withdrawals from the Beacon Chain. That staked ETH that’s been collecting interest will finally be available.

About 14% of total ETH supply is staked, and it can be unstaked after the Shanghai fork. This makes some people bearish. But that ETH doesn’t come onto the market immediately: it still has to go through a withdrawal queue. It takes time to unstake.

He went on to discuss how Liquid Staking Derivatives (LSDs), such as Lido, Rocket Pool, and Stakewise, which “allow people to stake their tokens without locking them up,” would be impacted by the Shanghai hard fork.

Last month, the popular pseudonymous host of crypto market analysis show “Coin Bureau” said that if the Shanghai upgrade goes well, “2023 could be a really big year for Ethereum and for ETH.” 

In December, Coin Bureau released a video update (titled “Q&A: ETH Predictions, BTC & Crypto Market in 2023!”) and according to a report by The Daily Hodl, the host of the show had this to say about the potential impact of the upcoming Shanghai network upgrade and the overall outlook for Ethereum in 2023:

When they see that ETH can in fact be unstaked and easily sold, then it might incentivize them to actually stake themselves. So I really think it could go either way. Now, I wouldn’t at all be surprised if it was slightly bearish in the short term if we do see some selling. But I think the future for ETH is so, so bright, and I think Shanghai, assuming it goes off without a hitch as the merge did, then I think 2023 could be a really big year for Ethereum and for ETH...

Price prediction, I don’t know… I don’t think we’re going to see a five-figure ETH in 2023, but I think that’s entirely possible. We could, of course, see, a flippening, but I’m not sure. I’m expecting very much kind of sideways price action for ETH over the course of next year.

Image Credit

Featured Image via Pixabay