This week, the awaited Ethereum upgrade will finally go live and will unlock upwards of $33 billion in funds as well.
The new upgrade is called Shapella, which will allow the ETH holders access to their staked ether (ETH) funds. These funds were staked and locked for a period of 3 years.
The reason behind this staking process is to allow the ETH's network to upgrade and enhance security. In return, the investors who staked their ETH earned an attractive ROI!
According to available reports, around $33.37 billion worth of Ethereum (ETH) was staked, which makes up for 15% of the total coins.
But once the blockchain is upgraded, around 1.1 million ETH will become available for withdrawals once again in the next week. That's worth around $2 billion if the price of one ETH is $1860.
Now the biggest question is what will happen once so much ETH becomes available for withdrawal. If the majority of investors end up selling their ETH, it would send the ETH value lower.
As far as the volatility is concerned, there's no doubt that some major volatility is on the cards for the short term.
There are a lot of analysts who believe that unlocking these staked coins will lead to big withdrawals and a lot of selling.
But there's another piece of the puzzle to this ETH story... Only 29% of the Ether (ETH) was staked at a value that can be considered profit (when compared with the recent ETH price). So if the majority of ETH investors end up selling their coins, they would be doing so at a loss.
For now, there are only speculations as no one really knows where these staked ETH will go... But if the staked ETH end up getting sold at the current prices, it wouldn't be good news for the ETH investors at all.