Many sites with numerous chains have implemented crypto staking, or pledging your assets to sustain a blockchain network and confirm transactions. In actuality, staking a sizable sum of ETH onto the smart contract caused Ethereum 2.0 to launch.
The SEC allegedly forbidding cryptocurrency staking by ordinary traders has upset the cryptocurrency community. Brain Armstrong, the CEO of Coinbase, was the first to report. Dune study shows that Coinbase is the third-largest depositor, with Lido and other platforms vying for first place.
Armstrong added that regulation by enforcement would force companies to move offshore. This would lead to more FTX-like problems for the crypto industry, according to him.
Post-update FUD?
Armstrong's remark caused FUD in the cryptocurrency community since several well-known Twitter accounts fueled the flames. The news that the Kraken exchange has agreed to stop crypto staking in the US and has paid a $30 million punishment to the SEC has made the situation even worse.
Shanghai Upgrade
Ethereum Shanghai Fork Upgrade is set to introduce a bunch of critical updates and changes to Ethereum in the blockchain’s EVM functionalities. Prior to the actual release.
So what is this upgrade?
- Since the transition started in 2020, users haven't been able to remove their staked funds.
- The Shanghai Upgrade is an Ethereum Improvement Proposal (EIP) that adds the withdrawal functionality.
What are the implications of this?
- A significant amount of liquidity will be unlocked, which might affect $ETH's price.
- However, staking on ETH may be more attractive due to its improved liquidity, potentially increasing demand.
The network just released the Shapella fork on the Zhejiang testnet. If all goes well, then the testnet will be launched on the Gorili too.
Overall, this EIP promotes a freer market. Ethereum’s Shanghai upgrade, scheduled for mid-March, will raise the blockchain’s staking ratio in the medium term, JPMorgan (JPM) said in a research report Wednesday.
Impact of Staking Ban on Ethereum
Current news of SEC fines cryptocurrency exchange Kraken for offering unregistered securities through its staking program will impact the growth of Ethereum, especially with the much-awaited Shanghai Upgrade coming soon. The SEC’s investigations and potential new rulings could impact Ethereum negatively.
Despite this, the Ethereum network was still breaking records as of the time of publication, with more than 94 million non-zero addresses and over 527,000 ETH 2.0 staked addresses. If ETH finds steady rise in traders and investors, we can expect Ethereum price prediction 2023 to initiate on a bullish note. Which could drive in more alliances, adoptions, and investors. Wherefore, the price of ETH according to coinpedia could end the trade for 2023 at $1866.79.
