Shanghai Upgrade to Revolutionize Ethereum’s Economics: Could ETH Overtake Bitcoin?

In the Brief:

  • Ethereum's Shanghai upgrade could revolutionize cryptocurrency use
  • Amphibian Capital predicts Ethereum could become one of the world's three most valuable assets in the next decade due to its liquidity, democratized staking process and Proof-of-Stake consensus
  • Cryptoinvestors are moving towards self-custody
  • The upgrade may increase institutional investments, decrease inflationary pressure and change how cryptocurrency is approached

2 - 4 minute read

Ethereum is set to undergo a significant upgrade called the Shanghai upgrade that has the potential to revolutionize the way we approach and use cryptocurrencies. While the exact impact of the Shanghai upgrade is still unclear, financial experts believe that in the long run, going entirely proof-of-stake will only bring more benefits to the network and raise ETH’s price, leading to possible competition with Bitcoin as the leading cryptocurrency in the world.

Amphibian Capital predicts that Ethereum will reign supreme as one of the world’s three most valuable assets in the next decade. The Shanghai upgrade is a fundamental step in the right direction because it will increase liquidity, attract institutional investment, and make staking more accessible and efficient. After staking withdrawals are unlocked, institutions will be able to stake and earn a yield that will resemble fixed financial instruments.

The Shanghai upgrade to Ethereum has many advantages. One of the most significant is that it will democratize the staking process, allowing for greater participation in the network, ultimately leading to increased security and decentralization of the network, which is a bullish sign. Moreover, the merge upgrade transitioned the Ethereum blockchain to a Proof-of-Stake consensus system, making Ether even more deflationary, increasing its value over time.

Furthermore, recent data suggests that crypto investors have been increasingly moving towards self-custody since September 2022, with nearly 90% of all ETH supply in self-custody. This reduces sell pressure, as capital moves to the sidelines, limiting future sell-offs.

Investors should take the long-term view and understand the potential rewards and risks when investing in ETH. Increasing investment may broaden the market and increase liquidity, while the surge in supply may cause a short-term bearish impact on the market. In the long run, however, the Shanghai upgrade has the potential to increase institutional investment, democratize the staking process, decrease inflationary pressures, and transform the way we approach cryptocurrency. As always, investors should thoroughly research and analyze the market before making any investment decisions.

The Bottom Line

The Ethereum network’s upgrade to Proof-of-Stake is likely to increase institutional adoption of cryptocurrencies, making Ether more accessible and efficient. While investors may fear a surge in supply causing a sell-off, recent data suggests there may be limited selling pressure on the Ethereum market in the near term. Hence, investors are encouraged to take the long-term perspective, understand the potential rewards and risks, and invest in ETH in the best way that suits them.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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