04/16 update below. This post was originally published on April 14
BitcoinBTC and ethereum have each rocketed higher this week after a surprise bitcoin easter egg fueled a wild Satoshi Nakamoto identity theory.
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The bitcoin price has topped $30,000 per bitcoin for the first time since June last year while the ethereum price has crossed the $2,000 per ether level, helped by ethereum’s long-awaited Shanghai upgrade and Coinbase’s chief executive revealing an exciting bitcoin upgrade.
Now, ethereum cofounder and the project’s spirital leader Vitalik Buterin has said the network needs to urgently focus on solving its scaling issues before the next bitcoin, ethereum and crypto price bull run.
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“If we dont fix scaling before the next bull run, people are going to be stuck paying $500 transaction fees,” Buterin said in a live stream reported by The Defiant ahead of the network’s closely-watched upgrade that has been branded Shapella—a combination of Shanghai and Capella.
Buterin warned that if ethereum doesn’t solve its scaling issues before the next crypto bull run, a spike in on-chain activity could result in ethereum users being hit with sky-high transaction fees—as happened in previous bitcoin, ethereum and crypto price bull runs.
“The Shapella upgrade closes the loop on some things that are part of the PoS [proof-of-stake] transition but did not make it in time for the merge, withdrawals obviously being really important,” Buterin said during the Ethereum Foundation live stream. “The immediate next focus after this… is going to be scaling.”
Ethereum’s ‘merge’ to a proof-of-stake from bitcoin’s more energy-demanding proof-of-work last year saw miners replaced with “validators” who can stake their ethereum to the network in return for “yield.” This week’s Shanghai upgrade means those who had already staked ethereum to the blockchain can now withdraw it.
04/16 update: The ethereum blockchain currently has just over $2 billion waiting to be withdrawn after topping $3 billion on Friday.
Some fear the looming wall of withdrawals that could be offloaded onto the market will add pressure to the ethereum price. However, this has failed to happen so far, with the ethereum price adding over 10% this week and topping $2,000 per ether for the first time since last summer.
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The upgrade has also re-ignited hopes that Wall Street and institutional investors could be about to pile into the market.
“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,” Mona El Isa, the chief executive of crypto-focused asset management company Avantgarde Finance, said in emailed comments, adding Avantgarde has “seen increased interest from institutional investors” looking to get into bitcoin, ethereum and crypto.
“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 ethereum, which could prove bullish for the price of the asset long-term.”
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