Ether Capital CEO Brian Mosoff believes that the upcoming Ethereum Shanghai hard fork may not have a significant impact on the price of ETH.
According to Mosov, the network upgrade could attract a new wave of investors. “I would like to see more ETH locked up in staking protocols, whether from individual stakers or from structured products that re-enter the market, allowing new investors to earn some return on the ETH they put in. This will start Injecting more confidence into the space for traditional finance,” Mosov said.
With the much-anticipated Shanghai upgrade looming, there is speculation about how it might affect the price of ETH, the native cryptocurrency of the Ethereum blockchain. However, Mosoff’s view offers a more optimistic outlook, suggesting that the upgrade may not have a significant immediate impact on ETH’s price.
Mosoff expanded on his point, noting that the upgrade could result in more ETH being locked in the staking protocol.
Staking involves users locking up their ETH for a period of time to support the operation of the network and earn rewards in return. This process helps secure the blockchain and reduces the supply of ETH available for transactions, which can affect its price.
In addition, Mosov pointed out that the upgrade may also pave the way for more structured investment products to be launched in the market. These products, such as exchange-traded funds (ETFs) or other investment vehicles, may appeal to institutional investors who are seeking exposure to the cryptocurrency market but may be hesitant due to regulatory concerns or other factors. By providing investors with more ways to earn returns in ETH, it can bolster the confidence of traditional finance entering the cryptocurrency space.
However, Mosoff also emphasized that the impact of the Shanghai upgrade on ETH prices may not be immediate and may take some time to be reflected. Market dynamics, investor sentiment, and various other factors may also come into play, affecting the price of ETH in the short-term.
Notably, the Shanghai hard fork is part of a larger transition in Ethereum from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism, dubbed Ethereum 2.0.
PoS promises to make the network more scalable, secure, and sustainable because it relies on validators staking their ETH instead of miners solving complex mathematical puzzles as in PoW. The Shanghai upgrade specifically aims to implement important changes to Ethereum’s PoS protocol, including updating the Ethereum Improvement Proposal (EIP) and the Eth1-Eth2 merge.