Ethereum
In mid-April, the Shanghai hard fork is due to take place on the Ethereum network. It will enable validators and staking investors to withdraw coins. To date, the deposit contract includes an investment of 17.6 million ETH or $29 billion. This exceeds 14% of the total cryptocurrency supply.
The collapse of Ethereum is close
Recall that a few days ago, the Shapella test passed on the test network. When testing, the developers once again reported a number of problems. However, the test has been completed and the developers are going to hard fork the main network in mid-April.
Ethereum prices are expected to fall in April
Ethereum prices are expected to fall in April
Based on the above information, a significant amount is subject to unlocking. Developers have very serious concerns that validators will start to flee ETH en masse. As a result, the price of Ethereum will plummet.
If each validator is going to withdraw a full block of 32 ETH, then the daily outflow will be at least 70,000 ETH, or $116 million per day. Thus, the hard fork will have an extremely negative impact on the price of Ethereum after it starts.
Users are scared that US regulators are stepping up pressure on Ethereum. Recall that in February, the Kraken cryptocurrency exchange, in a pre-trial settlement with the SEC, agreed to refuse to provide staking services and pay a $30 million fine.
As you know, Kraken holds a 7% stake in staking with 1.2 million ETH locked up. After the hard fork, the exchange will queue up to withdraw the entire amount to return funds to users. If you take into account the speed limits, then only for the processing of its applications will have to spend at least 16 days.
The most interesting thing is that it is likely that Coinbase will be forced to follow the path of the Kraken exchange, that is, it will be forced to abandon staking. At the moment, Coinbase is considered the second largest player in ETH with a share of 12.6%.
The head of the SEC, Gary Gensler, has repeatedly said that Ethereum should be recognized as a security, due to the possibility of staking coins on PoS and the expectation of clients to receive passive profit.
A similar point of view is shared by the New York Attorney General’s Office, which filed a lawsuit on March 9 against the KuCoin exchange after employees purchased Ethereum on it. According to the prosecutor’s office, in order to sell these assets, the exchange must have a license to participate in the securities market.
How much can the price of Ethereum fall?
How much can the price of Ethereum fall?
If validators start withdrawing their coins en masse, then the value of Ethereum could fall below the psychologically important mark of $ 1,000, and then roll back even lower. What will Vitalik Buterin do then and how will he protect his beloved brainchild?
Author: Vadim Gruzdev, analyst Freedman Сlub Crypto News
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