After Ethereum’s Shapella update, there were fears that its USD price and that of Bitcoin might fall.
What turned out to be the case was quite the opposite.
The fact is that Shapella, i.e., Shanghai + Capella, has finally opened withdrawals of staked ETH, so the fear was that they might be withdrawn en masse and then sold immediately. This has not happened.
Ethereum (ETH) in staking
The staking of ETH on the new Ethereum blockchain (Beacon Chain) began in December 2020, or more than two years ago. Until yesterday, all ETH staked on Beacon Chain were reported to be locked and not withdrawable.
Thanks to the Shapella update they have been unlocked, and thus it has become possible to withdraw them. Nevertheless, only very few people withdrew them yesterday.
Before Shapella there were more than 18,013,000 ETH reported to be in staking, while now it is only down to 17,972,000. So only 0.23% of all ETH in staking were withdrawn yesterday, which is an insignificant percentage and completely irrelevant.
However, a couple of considerations should be added.
The first is that not all ETH staking pools have actually already reactivated withdrawals. For example, that of Binance, one of the top three, will only reactivate them next week.
The second is that with ETH prices going back up, it is more than plausible that many for now have decided to continue staking them.
When Binance also reactivates withdrawals of ETH in staking, in case the price of Ethereum starts to fall, someone might get so scared that they decide to withdraw and sell the ETH they still have in staking. So the current situation is definitely good, but it may not last.
The USD price of Ethereum
On 3 April, the USD price of Ethereum started to rise more than that of Bitcoin. It is possible that this difference was due precisely to the anticipation of the Shapella update, which occurred on the night of 12-13 April.
At that time, 1 ETH was worth just over 1,800 USD, and within two days it had already risen above 1,900 USD.
However, over the next four days it had fallen, returning to around $1,840. On 12 April it was still at $1,860, but on the very night when the update occurred it began to rise.
First it moved back above $1,900 very quickly, then yesterday it also rose back above $2,000. Tonight it also went above $2,100, and for now it seems to have stopped there.
Analyzing the price of the LDO token from Lido DAO, the world’s main ETH staking pool, we see that the day before Shapella, there had been a sharp 11% drop, perhaps because a mass withdrawal was feared. Instead, on the day of the update such a withdrawal did not occur, and the price of the token bounced 2%.
When it was later discovered that the withdrawals from ETH staking had been insignificant, it rallied a further +15%.
In light of this, it is possible to say that probably the rise of the ETH price above $2,000 after the Shapella update is due to the thinning of fears about a possible mass sale of staked ETH.
The USD price of Bitcoin
It seems that the price of BTC has also benefited from this trend, although less than Ethereum.
Until 10 April it was still just above $28,000, but already by the next day it had risen above $30,000.
It is worth noting that 11 April was the day before Shapella, and on 12 April it briefly returned below $30,000.
Yesterday, however, it climbed back up first to $30,400, and then overnight also to $30,700.
Today it also made an unsuccessful first attempt to break above $31,000 USD as well, but at this point it is possible that it will make another attempt.
It is worth noting that $30,000 is a key threshold, because it is the one around which the price of BTC fluctuated after the implosion of the Terra/Luna ecosystem in May last year.
Before that collapse it was at 38,000, which is a figure that still appears far off to this day. It is worth mentioning that in the second half of May 2022 it never managed to break above $32,000 sharply and decisively.
However, there is one aspect that deserves additional consideration.
Compared to the beginning of the year, the price of BTC has increased by as much as 85%, which is a remarkable rebound after the 2022 crashes.
However, this could be interpreted as a mere rebound due to an excessive underestimation of its real market value during the second half of 2022, that is, from the Celsius bankruptcy onward. Indeed to date it has recovered all the losses it accumulated after Terra’s collapse.
Conversely, it could also be interpreted as an excess of enthusiasm that has come to form in the new year, but it should not be forgotten that none of the 2022 collapses were due to problems relating specifically to Bitcoin.
On the contrary, the only major problem related to cryptocurrencies was the implosion of the Terra/Luna ecosystem, because all the others had to do with traditional companies that went bankrupt due to bad management. So it is plausible that the declines in the second half of 2022 for the price of Bitcoin were excessive.