Ethereum: Shanghai Upgrade and What Investors Need to Know

The Ethereum network is undergoing the Shanghai upgrade, allowing individuals who have "staked" their ETH to withdraw their holdings.

While some may be concerned about potential sell pressure, the withdrawal process is designed to prevent a massive sell-off. Additionally, only a small percentage of ETH stakers are currently in profit, suggesting that selling now would not be wise for rational investors with a long-term outlook.

Ethereum’s smart contract ecosystem is the oldest and most established, and its value can increase exponentially with adoption. ETH’s value is linked to its network effects, with more apps and users driving demand for the cryptocurrency.

While new ETH is issued as compensation to network nodes, a burn mechanism that destroys a small amount of ETH per transaction reduces the supply of ETH, even during a bear market.

As adoption increases and the market cap grows, volatility should decrease, making ETH a more stable investment.

While some regulators may attempt to slow adoption, this is unlikely to succeed as it is driven by younger generations who will soon become voters.

Additionally, governments that do not support innovation risk losing crypto companies to countries like Dubai, Hong Kong, and the UK.

The upcoming Shanghai upgrade is the first step in making Ethereum more user-friendly and reducing fees. Investors who take a long-term view may find ETH a valuable asset.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.