Ethereum leapt more than 5% on Friday morning (14 April) as the software upgrade known as "Shapella" went smoothly after it took effect on 12 April, in a move will give investors access to more than $30 billion of the digital tokens.
In early reaction, president of MAMA (Multichain Asset Managers Association) Mona El Isa, who is also CEO of on-chain fund platform Avantgarde Finance said: "The highly anticipated Ethereum Shanghai Upgrade is potentially game changing and could be the catalyst towards digital assets becoming mainstream in the majority of funds.
"In simple terms, the update builds on Ethereum's move to a proof-of-stake blockchain model, last year. This was a step away from the original ‘miners' blockchain management system (as used by Bitcoin), replacing it with ‘validators' - users who stake (ie. pledge) Ethereum (ETH) to keep the network running.
"The Shanghai upgrade means that users who stake ETH will now be able to withdraw their money. Once staking withdrawals are unlocked, institutions will be able to stake and earn a yield that mirrors fixed financial instruments such as bonds in traditional capital markets. After the Shanghai fork, staking yields from Ether could be synonymous with the risk-free rate that traditional capital markets use to price their assets.
"This newfound liquidity will be seen as a move to de-risking digital asset allocations by institutional investors, who have previously been put off by Ethereum's old version that locked money in. With the removal of a major barrier we would expect to see a rapid move towards investors staking ETH which could prove bullish for the price of the asset long-term."
