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- 📈 Why Ethereum just hit an 11-month high 👀
📈 Why Ethereum just hit an 11-month high 👀
PLUS: the best-performing asset by year
Alex M.
April 17, 2023
🧙♂️
GM everyone. This is 2036, the crypto newsletter that pays you 💸
Last week, Ethereum underwent its latest major upgrade.
Analysts predicted it was a “buy the rumor, sell the news” event that would crash the price of ETH.
But last night, Ethereum hit a new 11-month high.
What’s happening? And is it too late to buy?
Let’s dig in.
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If you read 2036 last week, you know what happened.
But for the newcomers, here’s the 7-second summary:
In September 2022, Ethereum finalized its transition from being a blockchain secured by computers solving problems (proof-of-work) to one secured by users locking up their funds (proof-of-stake).
In exchange for locking up their funds (for up to 2 years), users received a yield of 4-5% annually.
Last week, the locked-up ETH and the rewards were finally made available for withdrawal for the first time.
As part of the upgrade, users can now withdraw their locked-up ETH at any time.
A lot of people believed most people would withdraw and sell their ETH and their rewards a.k.a this would be a negative event.
But as we pointed out last week, we think this event is hugely POSITIVE - and bullish - for ETH.
Going forward, large institutions who don’t want to lock up their funds for a long time can now stake and unstake ETH at any time.
They can buy one of the most trusted assets in crypto - Ethereum - and get a yield on it.
This is huge news for crypto (and finance in general) because ETH just became the first mainstream crypto-native bond.
So far, only 5% of stakers have withdrawn their deposits - and new deposits are coming in hot.
Now - there are queues and not all the ETH can be unstaked at once. But withdrawals are slowing down.
On top of that, 46% of the ETH waiting to be withdrawn is from Kraken, which is forced to unstake its ETH because it’s shutting down its staking service alltogether:
The Kraken ETH could easily be staked somewhere else
So on balance, the market seems to agree that this is good news 🎉.
In the last 5 days since the upgrade, ETH is up nearly 10%.
Of course, there’s no telling exactly where this will go.
More decentralized and centralized exchanges will enable withdrawals in the next couple of days and weeks.
But in the long-term, we believe this has massively de-risked Ethereum.
And if you’re wondering whether it’s too late to buy ETH, remember that contrary to bitcoin - which is an element, like digital gold - Ethereum is like the US economy in that:
it’s the fastest-growing large economy with
the biggest property market (NFTs)
the biggest banks (DeFi)
the largest market capitalization (ETH)
companies (DAOs)
roads and infrastructure (layer 2s)
and that in the last bull market, Ether went up 46X.
Ethereum is growing, de-risking, and in the words of Prince Vitalik himself - will be “done” this year.
So we don’t know about you, but we’re dancing like JT and Uma Thurman.
we twistin’ to ETH
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