Ethereum Poised to Break Out Ahead of Shanghai Upgrade
MIM #9: $DOGE spikes 30%, Swiss-owned bank offers crypto services, and Happy Birthday to $BTC’s anonymous creator
To speed or not to speed, that is the question, and I’m not talking about bulleting down the motorway at 160 MPH. I’m saving that type of speeding for this week’s Nakamoto Games $2,000 Fun Wheels tournament.
Nope. I’m talking about whether to put the pedal to the metal on Ethereum accumulation ahead of the Shanghai Upgrade. We usually talk about crypto’s champion Bitcoin in the introduction, but the Bitcoin market has been pretty quiet this week. Today, we will look at Ethereum, which is up 8% in 14 days as of writing.
(Source: Coingecko.com)
According to a research report by Bernstein Wealth Management as per CoinDesk, Ether (ETH) is showing signs of breaking out ahead of the scheduled Shanghai Upgrade of the Ethereum blockchain on April 12th. On April 5th, the number one contender to the crypto crown surged to $1,941, its highest since last August, a rally reminiscent of the surge before last September’s Merge upgrade.
The Shanghai upgrade will allow the withdrawal of staked Ether. Some investors have expressed concerns about a potential supply overhang as stakers can now withdraw their ETH deposit and rewards. If this were to occur, it would cause a decline in the price of $ETH.
However, Bernstein points out that nearly 70% of staked Ether is through liquid staking protocols such as Lido, which already allow investors to sell their $ETH regardless. Therefore, liquidity for most staked ETH is not new, as most investors had that option regardless of the upgrade.
The ability to deposit and withdraw Ether easily instills confidence in holders, and those on the sidelines may be more likely to stake now. This sounds like a great time to get in on the Ether action. Story one this week is my Ether plan of action!
Last week’s crypto news
- DeFi platform Pendle Finance has attracted over $50 million in investments due to its high Ether yields. The total locked value of assets on the platform has increased by over 300% since the beginning of the year, and staked Ether dominates the holdings. Pendle allows users to lock in fixed yields, buy yields for future returns, or switch strategies to gain from yields offered by different platforms. Some strategies offer as much as 82% annualized yields, with maturity dates in late 2023 or early 2024.
Ether yields on the Pendle platform (Source: Coindesk.com)
Pendle also offers investors the opportunity to purchase ether at a 5.8% discount, which can be made up for by capturing future expected yields on the principal amount. Call the cops guys, because Magic is speeding down the blockchain highway, stopping at destination Pendle!
2. PostFinance, a Swiss-owned financial services firm, has partnered with digital assets bank Sygnum to offer customers regulated crypto services. Customers can buy, store, and sell cryptocurrencies, including Bitcoin and Ethereum. PostFinance is Switzerland’s fifth-largest financial services firm, with over 2.5 million customers. It aims to provide trading and safekeeping within a secure regulatory framework. The partnership also enables PostFinance to offer revenue-generating services such as crypto staking.
3. Tether (USDT), the world’s largest dollar-pegged stablecoin, is nearing its record-high market capitalization of $83 billion, with a 20% increase this year. The rise is attributed to aggressive minting and issuance on the Tron Network, which has a massive presence in mainland China.
Source: Coingecko.com
4. The Reserve Bank of India (RBI) aims to scale its retail central bank digital currency (CBDC-R) to one million users within three months. The RBI had initially aimed at 500,000 users by July but is now privately targeting double that amount. The retail CBDC pilot began in December 2022 and has seen over 100,000 participants in four months. It is active in 15 cities with over 13 banks involved. The RBI is exploring solutions such as wearables, cards, Bluetooth technology, and smartphones for offline transactions, with more than 50 proposals submitted by the closing date of March 24. They are now liaising with private companies for scalability solutions, but partnerships have yet to be initiated.
5. Dogecoin and its CEO overlord were back in the news last week. The industry’s most popular meme coin saw a spike of over 30% after Twitter’s Elon Musk changed his company’s logo to an image of a Shiba Inu, the digital coin’s symbol. Musk has periodically tweeted about Dogecoin, causing immense rises in Dogecoin price. $DOGE dropped after Twitter stopped using the cryptocurrency’s mascot as its logo. It was recently down 7.3% to about 8.6 cents and got as low as 8.5 cents earlier in the aftermath of the change.
6. Last but not least, it’s time to say happy birthday to the king of Decentraland (the irony of that title is not lost on me). Happy 48th Birthday to Satoshi Nakamoto, the pseudonymous creator of Bitcoin! While we may never know the true identity of Satoshi, according to the birthdate entered when registering the pseudonym with The P2P Foundation, April 5, 1975, is celebrated as Satoshi’s birthday. Whether it is his birthday or not is another question, but the crypto community needs a holiday. So I’m willing to go with it! Bitcoin has evolved into an open-source protocol that has outgrown any single founder. Satoshi’s decision to step away from Bitcoin in 2011 allowed the protocol to flourish into a global monetary system worth over $500 billion. This demonstrates Satoshi’s foresight in creating a leaderless protocol, where Bitcoin’s ascension to prominence is nothing short of a minor miracle.
Bitcoin is now governed by rules without rulers, and its success and impact on the world speak for themselves. So on this special day, wherever you may be, Happy Birthday, Satoshi! My guess is he’s the mastermind behind Nakamoto Games! Nevertheless, we appreciate your creation, but we also recognize that Bitcoin has grown beyond any one individual.
Magic’s parting thoughts
So I am getting super excited about Ethereum this week, which isn’t usual in these newsletters. It’s true, $ETH looks stellar right now, but my heart will always be with $BTC. There’s a reason why I post about Bitcoin almost every day and believe it to be superior. Despite all the upgrades and improvements to the Ethereum blockchain, it will never overtake Bitcoin. Here is why.
Firstly, Bitcoin is the original cryptocurrency and the first blockchain-based digital asset. Bitcoin’s pioneering status has given it a significant head start. It has established itself as the most recognizable and widely accepted crypto brand worldwide, with a large and loyal community of users, miners, developers, and investors.
Secondly, Bitcoin primarily focuses on being a decentralized digital currency, and its design is optimized for that. It provides a peer-to-peer electronic cash system that is secure, transparent, and censorship-resistant.
Bitcoin’s limited supply of 21 million coins and its consensus mechanism, Proof of Work (PoW), give it security and stability. It has weathered numerous challenges and attacks over the years and has maintained its status as the most secure and reliable blockchain network.
Bitcoin is now becoming widely adopted as a store of value and a hedge against inflation, a narrative that has become more relevant than ever with recent financial turmoil. As traditional financial systems face inflation, geopolitical uncertainties, and currency devaluations, Bitcoin represents a viable alternative for institutional investors to conventional finance products.
On the other hand, Ethereum has a different focus. It is designed as a smart contract platform that allows developers to build dApps on top of its blockchain. This innovation has opened up new possibilities for DeFi, NFTs, and other applications beyond transactions.
However, Ethereum’s complexity and flexibility also come with trade-offs. Higher transaction fees, slower block times, and potential security risks are critical issues that must be addressed.
While Ethereum has made significant contributions to the industry and has its unique use cases, Bitcoin has several inherent advantages that likely keep it ahead of Ethereum.
So there you have it. I’m not jumping ship anytime soon. However, I might pirate the Ethereum boat to see if they are housing that sweet magical internet money. That’s it, Speedsters. See you next week.
