Ethereum breaks $2,000 as Shanghai upgrade completes, leads crypto market

Key Takeaways

• 15% of the ETH supply had been locked until the Shanghai upgrade completed Thursday
• There was no extra selling pressure, however, with ETH leading the crypto market, up 4.6% today
• ETH has broken through the $2,000 barrier for the first time since May 2022

Ethereum stakers woke up for the first time in a long, long time this morning with the ability to…sell their ETH. 

The Shanghai upgrade has been completed, meaning all the staked Ether – some of which has been staked since 2020, when ETH was below $400 per token – is now available for sale. 

A common discourse in the run-up to the event was whether increased sell pressure would flood the market. I analysed this myself last month, with the market long discussing what the unprecedented event would do. 

But around 16 hours in – the upgrade completed at 22:42 UTC time Thursday – ETH has provided an emphatic answer, not only resisting downward pressure, but leading the crypto market, up 4.6% since the upgrade. 

Nothing spectacular, but on what amounts to a pretty flat day for the market across the board, a 4.6% jump since the upgrade is interesting. 

Of course, not all Ether was completely locked up. Liquid staking derivatives were widely available, allowing stakers to receive tokens in return for their staked ETH which could then be traded as proxies, providing them liquidity – with the promise that the derivative tokens could be redeemed 1:1 once the upgrade went live. 

This fact, in addition to the fact that the upgrade has long been priced in, ultimately combined to assuage any pressure on the price. 

How much Ether was in the staking contract?

Nonetheless, having full liquidity again does make a difference, and there had been musings in the market as to what this could do for the price. As the upgrade went live, there was a chunky 18.2 million ETH locked up – priced in or not, that is a massive portion. 

Comparing to the overall supply, that means over 15% of the supply was locked up…and then suddenly available for direct sale. 

Particularly interesting is the hold period here. The earliest stakers locked up their ETH in late 2020, when ETH traded below $400. They then watched it rise close to $5,000 per token before collapsing down below $1,000. And all this while, it was locked. 

That is a rollercoaster ride with many highs and…