Will the upgrade unlock institutional demand?
Crypto prices are riding higher as the industry passes several big milestones.
These include Ethereum’s successful Shanghai upgrade, the ninth month in a row of falling US inflation data, and a partnership between Twitter and eToro that will enable users of the social media platform to access crypto among other financial assets.
Leading the market, Ethereum rose 9% to become this week’s biggest winner, as Bitcoin briefly spiked above $31K. Meanwhile, smaller smart contract platforms Solana and Cardano raced higher with double-digit weekly gains in the wake of Ethereum’s big upgrade.
Read more after the jump.
This week’s focus
– Ethereum tops $2K after Shanghai — will the upgrade unlock institutional demand?
– Bitcoin briefly spikes above $30K
– Solana rings in $25 on release of Saga smartphone
Ethereum tops $2K after Shanghai — will the upgrade unlock institutional demand?
ETH is hitting highs not seen since May 2022
ETH topped $2K on Thursday, following the successful implementation of one of the most anticipated upgrades in Ethereum history: Shanghai.
The upgrade enabled the first withdrawals of staked ETH, which is a process that helps secure and validate transactions on the blockchain.
Since the upgrade, the amount of staked ETH being withdrawn has fallen, while staking deposits have remained steady, according to data from Dune Analytics.
In the words of eToro Global Markets Strategist Ben Laidler, this turn of events has eliminated “market fears about the overhang of $30 billion of staked ETH hitting the market”, setting the stage for upward price movement.
Looking ahead, the successful completion of Shapella has also raised hopes of increased institutional participation.
Speaking to Forbes, Mona El Isa, the CEO of asset management company Avantgarde Finance, said the unlocking of staked ETH “will be seen as a move to de-risk digital asset allocations by institutional investors, who have previously been put off by Ethereum’s old version that locked money in. With the removal of a major barrier, we would expect to see a rapid move towards investors staking Ethereum, which could prove bullish for the price of the asset long-term.”
Bitcoin briefly spikes above $30K
After a period of consolidation, BTC briefly topped $30K before testing support at $29K
Bitcoin briefly broke above $30K last Thursday before retreating to $29K.
The gains came on falling US inflation data, which has now hit new lows for nine months in a row.
According to eToro Global Markets Strategist Ben Laidler, this data suggests that inflation is not as stubborn as first thought, making investors more optimistic about US central bank monetary policy.
Aside from the improving macroeconomic conditions, Bitcoin could also be benefiting from optimism around the current price action. The chart shows a bullish breakout following a long period of sideways trading, and has led some analysts to call for another leg higher.
As Naeem Aslam, chief investment officer at Zaye Capital Markets, told Barrons: “The present price pattern is expected to generate a lot of attention, as well as FOMO (“fear of missing out”) among investors, many of whom have already missed out as the price has regained its significant losses,” said. “It is very conceivable that some profit-taking may occur at the present level, but given the momentum it is extremely probable that the price will continue to rise.”
Solana rings in $25 on Saga smartphone release
After several attempts to break through, SOL is once again pushing against resistance at $25
As Ethereum surged on successful implementation of the Shanghai upgrade, smaller smart contract blockchains including Cardano and Solana made double-digit gains.
Leading the pack, Solana added 18% to momentarily top $25 on the launch of Saga, a web3-focused smartphone described as a “flagship, security-conscious, crypto-first Android device from Solana Mobile”.
According to the announcement, the Saga was created to compete with the likes of the Apple iPhone and Samsung Galaxy in the highly-competitive smartphone sector
Thus far, the smartphone has been well-received by the crypto community, suggesting its release could mark a turnaround of fortunes for Solana.
Since the collapse of an exchange that was closely affiliated with the project last year, activity on the Solana blockchain has declined, with the number of active wallets falling 60% in the last three months alone.
In the last week, however, this has begun to change, and blockchain data from Solscan shows a significant increase in the number of addresses minting Solana NFTs in recent days.