Burniske’s Take on Ethereum’s Game-Changing Shapella Update: Staking to Reach New Highs

Chris Burniske, Partner at venture capital firm Placeholder, predicts bullish flows and increased staking percentages for Ethereum ($ETH) following the upcoming “Shapella” network upgrade.

On Wednesday (March 15), Coinbase explained what its users need to know about Ethereum’s upcoming Shapella Upgrade, which allows for withdrawals of staked Ether ($ETH) and is expected to be deployed to the Ethereum mainnet on April 12 (at 10:27 a.m. UTC, with epoch number 620,9536).

There have been concerns that the ability to withdraw funds could lead to an oversupply of $ETH on the market, especially since there’s approximately $29 billion worth of $ETH staked on the Ethereum network. However, according to a recent CoinDesk report, some crypto analysts believe that the volume of $ETH outflows would not be as much as many people expect, and investors should not worry about it.

According to Coinbase’s tweetstorm about the Shapella Upgrade (which includes Shanghai and Capella), users can continue staking their $ETH and earning up to 6.0% APY without any action required, as assets will remain safe during the upgrade. About 24 hours after the upgrade is completed, Coinbase will start taking unstaking requests. All requests are processed on-chain, and Coinbase will pass the unstaked funds and staking rewards to users once the Ethereum protocol releases them.

As Coinbase only acts as a conduit for the unstaking process, it cannot provide an exact waiting period for users requesting to unstake. However, the company anticipates high demand for unstaking soon after the upgrade, which may lead to the Ethereum protocol taking weeks to months to process these requests.

In a series of tweets on March 17, Chris Burniske, Partner at venture capital firm Placeholder, shared his thoughts on the upcoming Ethereum network upgrade, dubbed initially “Shanghai” and more recently referred to as “Shapella.”

Burniske anticipates that the upgrade will de-risk Ethereum staking and pave the way for increased staking percentages.
Burniske stated that Ethereum staking percentages could see a 2-4x increase in the quarters following the Shapella upgrade. He believes this will result in bullish flows rather than bearish and advises market participants to expect volatility but not be misled by short-term price fluctuations.

The Placeholder partner also refuted that the Shapella upgrade could lead to a significant dump of ETH in the market. He argued that critics who hold this view have yet to thoroughly consider the implications of the upgrade on market dynamics.

Burniske says that currently 15% of ETH is staked, compared to 50-70% for its cryptocurrency peers. According to Burniske, the lower percentage of staked ETH is due to the previously undefined lock-up period, which has presented too much risk for many investors. However, the Shapella upgrade will introduce a more defined lock-up period, which Burniske believes will encourage more people to stake their ETH.

In addition, he expects the Ether-Bitcoin (ETHBTC) ratio to exhibit temporary weakness before breaking out to the upside following the Shapella upgrade in April. Burniske also commented on the broader crypto market, noting that Bitcoin (BTC) rallying while traditional banks falter is pivotal for the industry. He suggested that when Bitcoin’s momentum slows, it could align with Ethereum’s push for increased staking post-Shapella.

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