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2022 wasn’t a good year for crypto, and while 2023 had initially started on a much more positive note, the good news didn’t last for long. With price fluctuations being more drastic than ever, investors found it increasingly difficult to juggle with the demands of maintaining their portfolios. As a result, many of them sold their holdings in order to avoid further capital loss. Others have taken the necessary steps to adjust their strategies to the new trends and make sure they exit this troublesome period as unscathed as possible.
Accessing a specialized exchange to buy Ethereum and other crypto is the first step in a successful trading venture. However, you must also be mindful of the value fluctuations, as well as the general economic and political situations in the world, in order to ensure your investments are as successful as possible and yield high revenue.
The latest cryptocurrency news is also very important to read if you’re aiming to become a better investor. The market is generally closely interrelated, and any change that occurs for one cryptocurrency is likely to impact the larger ecosystem, particularly in the case of the more well-known ones.
Ethereum To Host Bitcoin
Bitcoin is the first crypto to appear in the financial market, the blockchain that acts as a blueprint for all the following altcoins. Among them, Ethereum is the largest by market capitalization. This has led to many people believing that the two are essentially rivals and that ETH could also potentially replace Bitcoin someday. However, while nobody can tell for certain which cryptocurrency will become the most popular in a few years, it’s important to remember that the two aren’t essentially competitors.
The main reason for this is that their fundamentals are entirely different. While Bitcoin works as a store of value, Ethereum’s main purpose is to host decentralized apps and financial services. And while so far, there has been no indication that the two worlds will ever collide, it seems like the time has come for Bitcoin and Ethereum to join forces and create something new together.
A synthetic Bitcoin is set to be launched on the Ethereum blockchain through liquid staking derivatives. The purpose of this digital asset, set to be named eBTC, is to act as a fully decentralized coin backed solely by staked Ether and relying on smart contracts that are immutable in nature. There are also fewer censorship risks, as eBTC eliminates any custodial danger since anyone can mint and launch currency. While cryptocurrencies are traditionally decentralized, their emergence on mainstream markets has meant they’re becoming increasingly susceptible to tighter regulations. Ethereum-powered Bitcoin might just be the path ensuring censorship resistance.
Shanghai Upgrade
Since Ethereum is one of the most important parts of the crypto ecosystem, it goes without saying that any changes which occur within its blockchain system would be carefully monitored by investors. The Shanghai update is the latest in a long series of upgrades the blockchain has recorded since its incipient days. While originally set to be launched in March, it has been delayed until mid-April, with an expected release date during the second week of the month, on the 12th.
The upgrade is expected to affect the staking area of ETH. And while many have expressed concerns that mass withdrawals will cause the price of Ethereum to collapse, others believe there’s no need to rush to conclusions before Shanghai has even gone live. The latest announcement regarding the upgrade shows that investors might not be able to get their stakes immediately. Yet, both the partial and full withdrawals will remain available in due time.
Both solo stakers, as well as investors running their own validators, will have access to both. The partial method refers to the excess profits resulting from staking 32 Ether, and they can be accessed immediately, with validators continuing to add Beacon Chain Blocks. If you have your own validator, however, you must include the special 0x01 credential to be able to open withdrawals automatically. Because only sixteen partial withdrawals can be placed in a single slot every twelve seconds, you should expect the queue to last for at least several hours.
In the case of full withdrawals, it means that you remove the whole balance from the network, including the 32 ETH. Your validator ceases all participation in block processing. The method will become available gradually since this type of withdrawal can’t happen automatically.
Price Variations
Cryptocurrency prices are notoriously volatile, with price points often in stark contrast to one another. There are many things that influence the values, from trader engagement to the intervention of institutional investors or whales, which possess a large number of funds, as well as political events and market shifts. With the Shanghai upgrade on its way, analysts have expressed apprehension about how the updates could potentially impact the overall market.
When it comes to the selling pressure, the estimations are opposites depending on who you listen to. Many believe that the figures are unlikely to increase because selling pressure is typically elevated when there’s huge potential for investors to earn significant profits. Since Ethereum investors currently don’t have tremendous profit potential, pressure levels will likely remain low, with ETH unlikely to record a significant dip.
At the other end of the spectrum is the illiquid ETH, deposited into contracts directly by third parties and set-up nodes. Accounting for approximately 40% of the total amount, these coins will most likely sell following the unlocking. Research points to nearly 60% of these illiquid tokens, roughly 4 million ETH that is in immediate profit. Their users are more likely than not to perform withdrawals once they are officially enabled.
While the crypto market has been in some genuinely dire straits over 2022, its appeal for investors hasn’t been lost. The fact that several upgrades are underway, and they are set to change the world of blockchain, as you know, is only further proof that crypto has a lot left to show its followers. To ensure your trading ventures are successful, make sure to keep an eye out for any changes that occur. They could make or break your portfolio.
