Ether rallied past $2,000 for the first time since August after a widely anticipated software upgrade to the most commercially important blockchain went according to plan, and as worries of initial rapid outflows proved unfounded. The so-called Shanghai, or Shapella, update enables investors to queue up to withdraw Ether coins they had pledged to help operate the Ethereum network in return for rewards, a process called staking. And so far, 96% of withdrawal volume has been from users withdrawing their rewards instead of their entire stakes.
“This could still be volatile,” said Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. “There is a queue forming for ETH withdrawals, and the looming sell pressure from Kraken, Celsius and others — that have to un-stake” but the “overall liquidity situation is favorable for crypto assets.”