It is no secret that ETH has underperformed many other assets during the recent increase in prices. I attribute this to a lot of uncertainty and fear around the Shanghai upgrade to ETH. For those who are unaware the Shanghai upgrade allows those who have staked ETH to withdraw rewards and the ETH they staked.

With 14% of the ETH supply staked some are obviously concerned that when withdraws go live there will be a large amount of ETH hitting the market which could drive prices down.

In my opinion, the Shanghai upgrade is likely a non-event. The majority of stakers are underwater, and probably don’t have a ton of rewards to sell. Thanks to  liquid staking much of that staked supply is already functionally on the market. Stakers probably have a long term orientation to ETH and are not going to sell immediately. And finally, there is a withdrawal queue for the ETH – meaning there is no large supply hitting immediatley.

The Shanghai upgrade will be a non-event and may even be a bullish catalyst once it is over and no longer hanging over ETH.