Bitcoin Slips Below $30,000, Ether Staking Tokens Get Ahead of Shapella Upgrade

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Bitcoin (BTC) slipped below the crucial $30,000 level in the early hours of Europe on Wednesday as the overall market capitalization fell 1.2% in the past 24 hours.

Ether (ETH) traded just above $1,860, leading the decline among major tokens. Solana’s SOL remained in the green, while Cardano’s BNB, ADA and XRP gave up Monday night’s gains.

So-called Liquid Staking Tokens have crashed. Lidos IDO governance tokens fell 10%, while Rocket Pools RPL fell 8%. Both protocols lock in billions of dollars to provide Ether staking returns to users who can stake any amount of Ether to earn rewards without having to set up 32 Ether to run a validator node.

Wednesday morning’s decline resulted in the liquidation of more than 96% of longs, or price rise bets, since the early Asian hours, according to the data.

Traders likely took profits ahead of two key developments slated for Wednesday: the US Consumer Price Index (CPI) for March and the highly anticipated Shapella upgrade for the Ethereum network.

The US Federal Reserve is still concerned about the stickiness of inflation, and weaker inflation data could allow the Fed to opt for a 25 basis point rate hike at the May 2 FOMC meeting. , which could support traditional markets and riskier assets such as bitcoin.

On the other hand, Shappella a portmanteau of Shanghai and Capella, two major Ethereum network upgrades that are expected to take place simultaneously on April 12 will allow investors to withdraw their staked ether on the Ethereum blockchain. Staked Ether cannot currently be withdrawn or freely traded.

As such, some say the event could prove bullish for Ether as staking and capturing returns directly from the blockchain becomes more accessible to users.

Allowing withdrawals, boosted by the recent popularity of liquid staking platforms, will make ETH staking much more accessible to retail investors who were previously unwilling to stake ETH indefinitely, Chen Zhuling said. , CEO of staking service RockX, in a note. at CoinDesk earlier this week.

For now, however, traders seem to be taking risks.

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