The upcoming Shapella hard fork for Ethereum has generated fears about a sell-off of unstaked ether, which might lower its price.
- Ethereum’s (ETH) upcoming Shapella hard fork will allow users to withdraw their staked ether.
- The sell-off could result in a significant increase in selling pressure.
- ETH has been experiencing bullish sentiment in the last 24 hours.
In just eight days, Ethereum’s Shanghai upgrade, also known as the Shapella hard fork, will let users withdraw their “staked ether.” However, despite the benefits this development is expected to bring, there are growing concerns that it could trigger a sell-off of unstaked ether, leading to uncertainty in the market.
Investors are worried that the upcoming release of staked ether due to the Shapella hard fork could prompt some holders to rush to exchanges and sell their tokens. This could result in a significant increase in selling pressure, estimated to be worth billions of dollars. Analysts at K33 Research predict that approximately 1.3 million ETH, equivalent to roughly $2.4 billion, could flood the market.
The situation is made more complex by the anticipated sell-off of the staked balance of bankrupt crypto lender Celsius, which amounts to 158,176 ETH and is expected to recover some creditors’ funds.
Additionally, the San Francisco-based crypto exchange Kraken is set to unstake all ETH staked by US investors due to its Well’s Notice issued by the Securities and Exchange Commission (SEC). Hence, the San Francisco crypto exchange platform may sell 1.2 million ETH tokens staked through Kraken.
Will ETH Price Drop Post Shapella?
Combined, the potential sell-offs could result in a temporary drop in ether’s price, causing uncertainty in the market. While the entire balance cannot be unstaked immediately after the upgrade, about 1.1 million coins earned as rewards for staking are instantly withdrawable. Reports show more than 18 million ETH has been staked in the network since the Beacon Chain went live in December 2020.
At press time, Ethereum is trading up with an increase in its price by 2.86%, and the price is exchanging hands at $1,914.66.