About the Shanghai hard fork
After all, Shanghai will bring liquidity to Ethereum, as the cryptocurrency units that are staking on the Beacon Chain will be released for trading.
The release is based on EIP 4895 proposal, which will also make the network more scalable. During this phase, the network will fragment to increase throughput and reduce transmission speed.
Ethereum Virtual Machine (EVM) was also mentioned in Shanghai. Five proposals were made and approved by the developers. Accordingly, smart contracts will be executed more securely.
On October 18, 2022, an important step towards hard fork was taken which was the launch of the Shandong testnet.
How will ETH price react?
There is no exact answer at this time. Although the majority assumes that investors will sell after receiving the issued coins, this may not be the case.
First, with the attractive rewards of staking ETH, users can lock coins to help validate the network and still earn passive income.
Moreover, ETH is also the most reputable altcoin in the crypto market.
Investors who staked ETH were also who trust crypto and long time investors before The Merge happened. Therefore, the possibility that they want to devalue ETH is also very remote.
Ultimately, network upgrades often benefit altcoins. The Ethereum transition to PoS consensus proves it. Although this hard fork was priced in and ETH did not have much development after that, the volatility before The Merge was positive.
However, there is a negative point that must be considered. While the proposals are good, there is no guarantee they will all be implemented in the hard fork.
The nod by the developers just signals these suggestions will be available in beta. Therefore, in the event that Shanghai offers less than what the market is expecting, it is possible that the capitalization of ETH will be correct.