Key Takeaways

• 15% of the ETH supply was locked up until the Shanghai Upgrade concluded Thursday
• No additional selling pressure as ETH drove the crypto market with a 4.6% rise today
• ETH broke through the $2,000 threshold for the first time since May 2022

Ethereum stakers were suddenly able to sell their ETH this morning. 

The Shanghai Upgrade was completed. All staked assets are now secure Ether – some of which had been staked since late 2020, when ETH was below $400 per token – can now be sold. 

Prior to the event, there were conversations about whether more sell pressure would flood the market. I discussed this myself. Last monthThe crypto community had been speculating about the potential consequences of an unprecedented event. 

But 16 hours after the upgrade concluded at 22:42 UTC Thursday – ETH responded emphatically, not only avoiding downward pressure, but leading the crypto market, up 4.6% since the upgrade. 

The 4.6% rise in the market since the upgrade is quite remarkable. 

Of course, not all Ether was locked up completely. Liquid staking derivatives were available, allowing stakers to receive tokens in return for their staked ETH which could then be traded as proxies, providing them liquidity – with the assurance that the derivative tokens could be redeemed 1:1 once the upgrade finished. 

In fact, the upgrade was taken into account for a long time, which helped to reduce any price pressure. 

How Much Ether Was in the staking agreement?

Nevertheless, having liquidity again makes a difference. There were also debates in the market about what this could mean for the price. As the upgrade began, there was a sizable 18.2 million ETH locked up – priced in or not, that is a huge portion. 

In comparison to the overall supply, that means over 15% of the supply was locked up…and then suddenly available for direct sale. 

The hold period is especially intriguing. In late 2020, when ETH traded at $400 per unit, the earliest stakers secured their ETH. It then soared to as high as $5,000 per token, before it dropped below $1,000. It was eventually locked after all that. 

The rollercoaster ride is full of highs and lows. Many people believe that early stakeholders were more interested in the technology than the price. But at the end of the day, we are all humans. 

Ether Breaks $2,000

Not only has the fear of sell pressure proved to be false at this time – although that could still change – but Ethereum has surpassed the $2,000 mark for the first time since May 2022. That month when the crypto industry suffered a huge blow as LUNA’s value plummeted to zero, dragging a huge portion of its ecosystem down with it, was November. 

It’s probably not a stretch to say that the Shanghai Upgrade is a great time. Had it gone live last year when panic and fear were at its highest and prices were dropping across the board, the story could have been a lot different. 

Imagine if 15% of ETH’s supply suddenly became available one week after FTX collapsed. 

Instead, the upgrade took place during a time of optimism for crypto in general. Bitcoin has been above $30,000 since June, up 83% compared to the previous year. Innovators have enjoyed a 66% annual return on Ether. 

These gains come from low levels. Ethereum is still 60% below its all-time high in November 2021, when it reached $4,891, just a few short of the $5,000 threshold. 

It may be a while before ETH gets back up there – if it ever does, who knows in the crypto market? – but the Shanghai Upgrade was a success regardless of the price effects. 

The upgrade was delayed many times – originally meant to be part of the MergePreviously known as ETH 2.0. It was pushed out a number of times. But The Merge Last updated: September is now in the rearview, and ETH will continue to grow. FundamentallyThe upgrade was a success just like the Merge Last updated: September. 

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