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$34 Billion Ethereum (ETH) to Enter Market in 24 Hours

Tue, 04/11/2023 - 10:29
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Arman Shirinyan
Large quantities of Ethereum are on verge of entering market, but will it cause any trouble?
$34 Billion Ethereum (ETH) to Enter Market in 24 Hours
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As Ethereum finalizes its transition to a proof-of-stake (PoS) consensus mechanism with the upcoming Shapella fork, approximately $34 billion of locked, staked Ethereum (ETH) will become available for withdrawal by validators. The imminent unlock has led to speculation about the potential impact on the cryptocurrency market, especially considering that much of the locked volume is already liquid due to staking liquidity providers.

Staking liquidity providers have been issuing liquid tokens in exchange for locking Ethereum in contracts, allowing investors to access and trade their staked assets without needing to wait for the unlocking event. This has created a situation where a significant portion of the locked, staked Ethereum is already circulating on the market, potentially reducing the immediate impact of the $34 billion unlock.

However, it is still uncertain how the market will react to the unlocking event, as some investors may choose to sell their newly accessible Ethereum holdings, potentially putting downward pressure on the price. Others may decide to hold onto their Ethereum, anticipating further price appreciation as the network continues to evolve and improve with the transition to PoS.

The shift to a PoS consensus mechanism is expected to make Ethereum more energy-efficient, scalable and secure. This could result in increased demand for the cryptocurrency, as more developers and users are drawn to its improved capabilities. In the long term, the successful implementation of PoS could bolster Ethereum's position as the leading smart contract platform, driving further adoption and demand for the digital asset.

As more Ethereum is staked and withdrawn from contracts, the supply-demand dynamics could shift, potentially leading to an increase in the value of the asset.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.