Insight: Ethereum Whales’ Latest Moves Ahead of Shanghai Upgrade

Ethereum, the second-largest cryptocurrency by market value, is preparing for a significant update known as the Shanghai upgrade that is going to happen later today. As this critical event is upon us, notable Ethereum whales, such as Blockchain Capital, are making significant trades on the market in anticipation of potential market volatility.

Blockchain Capital Sells Lido DAO (LDO) Tokens

According to data from analytics provider Lookonchain, Blockchain Capital recently sold 1.5 million Lido DAO (LDO) tokens at a price of $2.33, generating a profit of $1.05 million. The firm initially purchased the LDO tokens with 1,000 ETH at an average price of $1.64 between Jan. 27 and Feb. 21, 2022. By selling these tokens, they received 1,871 ETH, valued at $3.57 million.

In addition to LDO tokens, Blockchain Capital bought and sold RPL, a popular cryptocurrency. According to Lookonchain, the company bought 59,236 RPL(new) with 2M $USDC at $34 on Apr 15, 2022, and bought 61,539 RPL(old) with 600 ETH($2.15M at that time) at $35 on Oct 8, 2021. They later sold 65,352 $RPL for 1,522 $ETH($2.9M) at $44, resulting in a profit of approximately $1.09 million.

Shanghai Upgrade May Have a Neutral to Bearish Impact on ETH Price

Although the Shanghai upgrade is expected to have a bullish impact on Ethereum’s ETH in the long run, leading Ethereum quant traders predict that the short-term price action will be neutral to potentially bearish. This prediction is due to the expected significant increase in the circulating supply of ETH after investors are finally able to withdraw their stakes.

However, after the Shanghai fork, staking yields from ETH could be similar to the risk-free rate that traditional capital markets use to price their assets. This development may attract more institutional capital into the crypto economy and increase liquidity and trading of Ethereum (ETH).

Limited Selling Pressure on Ethereum

Investors may be concerned that the Shanghai upgrade could cause a large sell-off of ETH, some of which has been staked since 2020. However, data from CryptoQuant suggests that this analysis is overstated.

60 percent of the staked ETH supply, or approximately 10.3 million ETH, is currently at a loss. Furthermore, Lido DAO, the largest Ethereum staking provider, holds 30% of all staked ETH at an average loss of $1,000. This suggests that there may be limited selling pressure on the Ethereum market in the short term.