An Ethereum transformation is on the horizon, and no one is sure how the market will respond. In time the “Shanghai” upgrade may be remembered as a uniquely bullish event for ether (ETH), the world’s second-largest cryptocurrency by market value.
In the short term, however, a number of the world’s leading Ethereum quant traders who historically have outperformed ETH staking yield believe price action will be neutral to potentially bearish due to the expected large increase in circulating supply of ETH after investors are finally able to withdraw their stakes.
Furthermore, as reported by Santiment, nearly 90% of all supply of ETH is in self-custody. Holders of crypto have been increasingly moving towards self-custody since September 2022. When the FTX exchange collapsed in November the trend accelerated, leading to a massive drop in ETH supplies on exchanges. This reduces immediate sell pressure as capital moves to the sidelines, and future sell-offs are expected to be limited.
