This week, investors will finally get access to more than $33 billion in ether thanks to a planned blockchain redesign.

Market participants will be able to redeem their “staked ether,” or currency they have placed and locked up on the network during the past three years in exchange for interest, thanks to a new software upgrade to the Ethereum blockchain called Shapella.

Almost 15% of all ether is staked, with a market value of $33.73 billion, according to statistics from Dune Analytics.

According to Sreejith Das, CEO of Attestant, a business that allows the staking of ether, up to 1.1 million ether will be available for withdrawals in the week following the redesign of the blockchain. Based on the most recent price of roughly $1,860 for ether, that would be worth close to $2 billion.

Traders looking for a competitive edge are currently attempting to predict how the sudden ether windfall would affect prices. Nevertheless, as Robert Quartly-Janeiro, chief strategy officer at cryptocurrency exchange Bitrue, noted, it’s challenging to determine.

The Shanghai hard fork will result in some short-term volatility, he continued, and that is the only thing that is definite.

Unlocking staked coins has some market participants concerned that it could trigger large withdrawals and a wave of selling, which could cause values to fall quickly.

Bundeep Rangar, CEO of blockchain investment firm Fineqia International, claims that just roughly 29% of all ether staked by volume is currently profitable in terms of dollars, indicating that the majority would be sold at a loss.

Hence, Rangar continued, “it appears doubtful that much of the staked ether will be traded.”

The puzzle’s “Final Piece”
For investors who chose to deposit ether in exchange for a dividend since the staking initiative started in 2020, Shapella would bring an end to a protracted wait.

The “Merge” upgrade, which replaced energy-intensive mining with a “proof-of-stake” mechanism in which ether owners lock up 32 coins to verify new records on the blockchain and earn additional ether on top of their “staked” coins, cleared the way for this development.

Before this week’s planned change, investors who wanted to stake coins had to deposit a minimum of 32 ether at a time (worth $59,520 at the current exchange rate) for an unlimited amount of time, which is a substantial sum out of the price range of the typical retail investor.

According to Dave Weisberger, CEO of digital asset trading platform CoinRoutes, “before Shanghai, a lot of people and institutions probably chose not to bet their ether since, if they did, it would have been locked up for an undetermined length of time, which was hazardous.”

Investors might be more inclined to stake currencies after the upgrade as staked ether won’t be locked up on the network.

Before this week’s planned change, investors who wanted to stake coins had to deposit a minimum of 32 ether at a time (worth $59,520 at the current exchange rate) for an unlimited amount of time, which is a substantial sum out of the price range of the typical retail investor.

According to Dave Weisberger, CEO of digital asset trading platform CoinRoutes, “before Shanghai, a lot of people and institutions probably chose not to bet their ether since, if they did, it would have been locked up for an undetermined length of time, which was hazardous.”

Investors might be more inclined to stake currencies after the upgrade as staked ether won’t be locked up on the network.

According to CoinMarketCap, the market value of the tokens backing some of the biggest projects offering liquidity for crypto staking, including Lido Finance and Rocket Pool, has increased this year by nearly six times to $2 billion and four times to $875 million, respectively, on expectations of further growth.

According to Rangar of Fineqia, “The amount of ether staked is anticipated to expand with time, especially when compared to the share of supply staked for other digital assets like Solana, Mathic, and Ada.”

What kind of investors are therefore likely to enter the market after Shapella’s changes?

The institutions who required the capacity to withdraw their ether before they were permitted to stake it will be those that have been waiting patiently for this final piece of the puzzle to be put in place, according to Das at Attestant.