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15% of the Ethereum supply is about to be released: Ethereum Shanghai upgrade imminent


Key Takeaways

  • The Ethereum Shanghai upgrade is imminent, meaning stakers will finally be able to unstake their ETH, some of which has been locked up since 2021
  • 17.7 million is ETH is staked, equivalent to 14.8% of the entire supply
  • This is just below the amount of ETH on exchanges, which is 18.3 million ETH, equivalent to 15.2% of the supply
  • Price effects of upgrade are likely already priced in, but this amount of supply being released is nonetheless notable

The Ethereum Shanghai upgrade is slated to occur in mid-April. While not as seismic a shift as the Merge event which took place last September, it is nonetheless an important moment for the world’s second-largest cryptocurrency. 

The most impactful consequence will be around Ethereum stakers. For the first time, those with staked ETH will be allowed to unstake their holdings. 

How much Ethereum is staked?

And that is a lot of ETH. Currently, there is 17.7 million Ether locked up in staking contracts, equivalent to 14.8% of the total supply. 

Once the upgrade goes live, this ETH will finally be eligible to hit the market. That may sound like a scary proposition, but in reality, there have been many liquid staking alternatives available throughout the staking period, which kicked off in late November. 

In such a way, stakers have received back liquid “tokens” which can be traded in place of ETH. These tokens can then be redeemed for actual ETH once the upgrade goes live – which we now know is imminent. 

Nonetheless, there may be some elevated selling pressure in the immediate aftermath of the event. The liquid tokens have traded for (usually small) discounts compared to ETH, while it will also now be more intuitive and simpler for people to sell.

Despite all this, concluding that this will dent ETH’s price would be naive. The market knows this is coming and that same old concept of “priced in” is gain relevant. Remember, many hypothesised that the Merge would drive a massive price increase, but it came and went with only minor volatility. 

If the Shanghai upgrade goes smoothly, it would not be a surprise to see the same happen here. 

Could the Ethereum staking yield be DeFi’s risk-free rate?

One thing I have wondered about is what the yield on staked ETH will look like going forward. 

One theory is that, if Ethereum continues to act as the base layer for decentralised finance, the staking yield could look like some sort of risk-free yield in the space. In such a way, it could be used as a benchmark to value investments in the space, much like the risk-free rate in traditional finance is used. 

Then again, with the way DeFi has gone over the last couple of years, maybe it won’t. The space has seen a flood of capital flee the space as the bear market has ravaged cryptocurrency as a whole. 

Where is the rest of ETH held?

With 15% of the ETH supply locked up in staking contracts, and the number steadily rising from when staking opened up in late 2020, the balance on exchanges has done the opposite. 

There is currently 18.3 million ETH on exchanges, equivalent to 15.2% of the supply, slightly above the 14.8% that is staked. 

The 18.3 million ETH on exchanges represents the lowest figure since June 2018, at the depths of the previous crypto winter. 

The chart shows that the balance has been falling steadily since ETH staking came online. 

Of course, the above charts are in native units. When flipping the denominated unit to the dollar value of ETH instead, you get a much wackier pattern. Nonetheless, the dollar value on exchanges is still above what it was until the first quarter of 2021.

As cryptocurrency markets as a whole rally off the back of renewed hope that the Federal Reserve will pivot off high interest rate policy sooner than previously anticipated, Ethereum has followed, trading at $1,800, its highest price since last September – right when the Merge occurred. 

Macro will continue to drive the price going forward, but the Shanghai upgrade is nonetheless an important moment as Ethereum solidifies its long process of switching from a proof-of-work blockchain to proof-of stake. 

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Magic Eden launches Bitcoin NFT marketplace

  • Magic Eden has launched the first fully audited Bitcoin NFT marketplace.
  • The marletplace has integrated two non-custodial wallets to support seamless transactions.
  • Magic Eden now supports NFT marketplaces for Solana, Ethereum, Polygon and Bitcoin.

Cross-chain NFT platform Magic Eden has added to the impetus around NFT Ordinals on Bitcoin by launching a fully audited Bitcoin NFT marketplace. The digital artifacts marketplace will feature everything from images and audio clips.

Magic Eden’s move means traders within the ecosystem are set to benefit from being able to buy and sell Bitcoin-based inscriptions tied to satoshi – the smallest unit of measuring value for BTC.

A new dimension to NFT universe

In a press release published on Tuesday, Magic Eden noted the infrastructure supporting Bitcoin inscriptions is growing, even as the network counts over 400,000 such digital artifacts so far. 

At the moment, the Bitcoin NFT marketplace has integrated two non-custodial wallets – Hiro and Xverse – with support for features such as listing, delisting and buying and selling. The marketplace already offers access to more than 70 collections.

Commenting on the development, Magic Eden co-founder and CEO Jack Lu, noted:

“Adding a Bitcoin marketplace is really exciting for our team, considering it is the grandfather of all blockchains and we are all passionate about blockchain. Bitcoin Ordinals bring a whole new dimension into the universe of NFTs.”

Part of the early efforts aimed at accelerating adoption include Magic Eden’s partnership with 13 top collections, including Inscribed Pepes, Taproot Wizards and Bitcoin Bandits. Digital artfacts on the platform will be subject to top quality filtering, with collectors having access to details such as Ordinal rarity, name, inscription number, age and so forth.

“On Bitcoin, all media that is uploaded onto the chain cannot be changed or removed,” Lu said in a statement. “This simplicity is embraced by many creators who want to create true collectibles that are inscribed onto the chain. We’re excited to bring our winning marketplace user experience we’ve developed over the last year and a half to Bitcoin.”

Magic Eden’s release of a Bitcoin NFFT marketplace builds on the company’s solid foundation as a top provider of blockchain and Web3 solutions. While it remains the leading NFT marketplace for Solana, this latest move adds to recent expansions to Ethereum and Polygon.

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Litecoin price prediction: LTC outlook ahead of Fed decision

  • The Federal Open Market Committee will conclude its two-day meeting on Wednesday.

  • This decision will likely have implications for Litecoin and other crypto prices.

  • Economists expect a more balanced Fed as it battles inflation and financial stability.

Litecoin price moved sideways on Wednesday as investors waited for the upcoming interest rate decision by the Federal Reserve. LTC was trading at $80, where it has been in the past few days. Other cryptocurrencies are also wavering, with Bitcoin trading at $28,255 and Ethereum stuck at $1,800. XRP and ADA are two of the best-performing big-cap coins.

Fed decision ahead

The main catalyst for Litecoin price will be the upcoming interest rate decision by the Fed. Economists polled by Reuters expect the Fed will maintain a relatively balanced tone as it combats some of the top challenges in the economy. 

The biggest challenge the Fed is facing is the stability of the financial system following the collapse of several banks, including Credit Suisse and Silicon Valley Bank. And now, several researchers believe that about 190 banks could fail because of their large unrealized losses. 

A lack of confidence in the financial market could lead to chaos as people rush to get their money out. That would put the American economy at risk. 

The other big risk is that America’s inflation seems to be sticky. Data published last week showed that America’s consumer price index (CPI) remained at 6% in February, much higher than the Fed’s target of 2%. As such, the bank will need to show its commitment for fighting inflation in the country. As such, the most balanced way will be for the bank to hike by 25 basis points. In a note, analysts at ING wrote:

“It’s a close call, but we expect a 25bp hike by the Fed today. Ultimately, Powell’s primary goal is to restore investor confidence and a hold might signal a lack of trust in the financial system. The dot plots may also be revised slightly higher, and the dollar could recover a bit.”

A hawkish tone by the Fed could dent the recent rally in cryptocurrencies. Most coins have jumped by double digits in the past few days as investors price in a more dovish tone by the bank. 

Litecoin price prediction 

The four-hour chart shows that the LTC price has moved sideways in the past few days. In this period, it has formed a symmetrical triangle pattern that is shown in red. The coin has moved slightly below the 50-period exponential moving average (EMA). 

Litecoin is also below the important resistance level at $88.36, the lowest point on February 13. The MACD has moved slightly below the neutral point. Therefore, there is a possibility that Litecoin’s price will have a bearish breakdown after the Fed decision. If this happens, the next reference level to watch will be at $70.

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The post Litecoin price prediction: LTC outlook ahead of Fed decision appeared first on CoinJournal.

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Avalanche price forecast after gaining 60% YTD

  • Avalanche gained 60% in less than three months
  • Despite the returns, the bearish bias persists
  • For bulls to have a case, the price should break out of a falling wedge pattern

The cryptocurrency market investor had a rough 2022 as the market tanked. But as bearish as the price action was last year, as bullish it is in 2023 so far. 

With a little over a week before the first quarter’s end, leading cryptocurrencies have rallied hard from their lows. Avalanche, for instance, gained 60% YTD, rallying together with Bitcoin. 

60% is a tremendous return over any period, let alone over less than three months. Yet, delivering such returns is not unusual for the cryptocurrency market. 

So where will AVAX/USD go from here? Will the bull run continue, or should investors book their profits and wait for the next opportunity?

AVAXUSD chart by TradingView

The bearish bias persists while a falling wedge remains intact

Avalanche found strong support at the $10 area and then rallied in 2023. But despite the returns delivered so far in the year, the bias remains bearish. 

Bulls are probably encouraged by a falling wedge pattern currently in the making. Indeed, a falling wedge is a bullish pattern, as it appears at the end of bearish trends. 

However, the signal to trade the market to the upside comes after the price breaks above the upper edge of the pattern. In other words, until then, it is just speculation, as the reversal pattern may be invalidated anytime. 

Therefore, those that bought Avalanche at the start of the trading year may find it wise to book some partial prices and wait for the price to move above the upper trendline. That is, above $20. 

The next level of resistance should be the $30 area, and from then on, the target is half the distance it took the pattern to form. On the flip side, if the price drops below $10, the reversal pattern gets invalidated, so that is the exit for any bullish setup. 

The post Avalanche price forecast after gaining 60% YTD appeared first on CoinJournal.

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Bloomberg analyst: Crypto supercycle likely on as BTC outperforms gold

  • Bitcoin is outperforming commodities and gold so far in 2023, with BTC showing a 10x outperformance of the precious metal.
  • Mike McGlone, a senior macro strategist at Bloomberg Intelligence, says Bitcoin could be in a new super cycle.
  • He earlier noted BTC above $25,000 demonstrated the cryptocurrency’s divergent strength.

Mike McGlone, a senior macro strategist at Bloomberg Intelligence, has noted that the crypto sector could be looking at a new super cycle amid bitcoin’s outperformance of commodities.

According to the analyst, Bitcoin (BTC) is so far beating top performing commodity asset gold in 2023, with BTC up nearly 10x more to suggest the flagship cryptocurrency may be in a super cycle. BTC price is up 79% year-to-date at the time of writing. Comparatiely, gold price has only gained 5.8% YTD, currently poised around $1,942. 

McGlone shared the outlook in comments shared via Twitter on Tuesday, his view of the market coming as bitcoin price continued to hover above $28,000. 

“Looking for a super cycle? Bitcoin Outperforms Commodities With Declining Risk – Bitcoin beating gold, the top-performing old-guard commodity in 2023 to March 20, by almost 10x may be indicative of a super cycle happening in the crypto,” the Bloomberg strategist stated.

Bitcoin’s divergent strength

According to McGlone, Bitcoin has one advantage over most commodities – its “nascent stage of low and rising adoption” as well as diminishing supply. He observes that BTC shows an elongated upward trajectory in terms of its price when compared to the Bloomberg Commodity Spot Index.

The outlook is similar across most assets and that despite a bottoming out of the 260-day volatility relative to commodities, Bitcoin is likely to recover vastly versus the asset class as bulls eye new highs.

As for the latest spike in Bitcoin price, the analyst points to the banking crisis and the issues around fractional reserves. In his view, such concerns are likely to be “shining a light” on Bitcoin’s attributes. On what could happen next for BTC, he opined:

“Relative strength vs. most assets may portend Bitcoin’s inflection toward global digital collateral and potential to trade more like gold [and] US Treasury bonds. Central banks still tightening despite plunging commodities and a banking crisis adds to severe economic-reset risks.”

Last week, McGlone pointed to the events in the finance and banking industry as a factor that could aid Bitcoin’s march towards becoming more of a hedge asset. Continuing weakness in the banking ecosystem portended a scenario where the benchmark cryptocurrency eventually trades like gold and US Treasury long bonds.

Bitcoin’s resilience above $25,000 would be an indicator of its divergent strength, he added.

The post Bloomberg analyst: Crypto supercycle likely on as BTC outperforms gold appeared first on CoinJournal.