JPMorgan and Fidelity weigh Shapella hard fork’s impact on Ethereum price

Analysts at JPMorgan Chase and Fidelity Investments have weighed the potential impact of the forthcoming Shapella hard fork on Ethereum’s price, The Block reports.

Scheduled for implementation on 12 April, the update will allow withdrawals from staking. According to ultrasound.money, since the Beacon Chain launched, users have locked 18.1 million ETH to earn passive income, which could potentially enter the market after the hard fork.

According to JPMorgan analysts, ETH prices are likely to face ‘some selling pressure’. At least this is linked to validators gaining access to more than 1 million ETH in staking rewards.

“If you factor in the additional impact from staked Ether held by troubled enterprises, downside pressure could rise in the coming weeks,” the bank’s analysts noted.

In their view, Ethereum’s momentum will be weaker than Bitcoin’s during this period.

Fidelity analysts believe that Shapella’s impact will not be uniform. After the network’s transition from the Proof-of-Work to Proof-of-Stake as a result of The Merge, validators’ operating costs have fallen significantly.

Following the recent rally, more than half of the coins in staking стали прибыльными, analysts added, arguing in favour of further holding of the assets.

Another important factor is liquid staking services. Platforms like Lido provide users with representative tokens in exchange for the locked assets, which can be used in market operations. Analysts at Fidelity noted that, thanks to this, about a third of staked Ether is effectively already liquid before the upgrade.

“Given the amount of ETH held by service providers, these organisations are likely to set their own unlock timelines,” the experts added.

Based on these factors, they expect a ‘muted’ impact of the hard fork on the cryptocurrency’s prices.

As Shapella approaches, inflows to Ethereum staking services have declined.