top of page

3rd March 2023 > > Shanghai and Silvergate.


The Shanghai upgrade is likely positive for ETH price though most commentators (as always) disagree with me, whilst that overnight pain seems a touch unjustified to contrarians worldwide.

Market Snap

Market Wrap

That was a short, sharp, painful move overnight dropping from $23.4k to $22.3k in less than an hour.

Meanwhile perpetual futures funding rates are deeply in the red, as the leveraged long children got smoked in that move.

For the reasons behind this move, please see the second commentary below.

Curious Cryptos’ Commentary – Shanghai upgrade

As discussed on 28th February 2023, the Shanghai upgrade to the Ethereum network is on track to go live in March 2023. One of the key elements of Shanghai is that staked ETH, which has been locked up to the implementation of Shanghai, can be unstaked.

I continue to read commentary stating that this will result in a flood of previously staked ETH coming to market and having a negative impact on the price. Readers already know that this narrative is false for several reasons, which we won’t repeat here.

There is also a material possibility – in my opinion - that the Shanghai upgrade will drive the price of ETH upwards.

At the moment, only about 14% of ETH has been staked, compared to ranges of 30% to 50% for other PoS (Proof-of-Stake) coins. I think the reason is obvious – the uncertainty of not knowing the date of Shanghai has undoubtedly been a weighty factor in the decision making process of whether to stake or not. Those that did decide to do so (and I put my hand up here) are committed holders.

Once Shanghai is in place, owners of ETH who earlier declined this opportunity but wish to earn staking rewards, whilst also retaining the flexibility of being able to unstake and sell if they so desire, will now feel comfortable staking their stash.

This will likely increase the percentage of ETH being staked and will bring in new buyers.

There is only ever one result from less supply and more demand, all other things being equal.

Curious Cryptos’ Commentary – Painful price action


Two days ago, Silvergate Bank issued a Form 12b-25 announcing the late filing of its 10-K report:

This is the latest fallout from the FTX fraudulent fiasco, an event I was hoping we had put behind us. Seemingly not.

In a scary comment, the company stated:

“These additional losses will negatively impact the regulatory capital ratios of the Company and the Company's wholly owned subsidiary, Silvergate Bank (the "Bank"), and could result in the Company and the Bank being less than well-capitalized.”

Silvergate is a banking partner to several prominent crypto firms, including Coinbase and

Both companies announced that they had stopped using Silvergate, quickly followed by Circle, the issuer of stablecoin USDC, who announced a reduction in their banking activities with Silvergate.

You won’t be surprised to learn that Silvergate shares are down nearly two-thirds on this news, and probably heading lower still.

The shares for the crypto companies above also took a hit due to general investor sentiment turning negative because of the uncertainty of the debtor/creditor relationship between those firms and Silvergate.

That has now, slightly belatedly, fed through into the price of BTC.

It is understandable why this has happened – fears that Coinbase could be the next FTX, if realised, would cause a temporary, yet large, price dislocation. Contrarians are polishing their buying boots in case these fears prove contagious.

13 views0 comments

Recent Posts

See All

15th July 2024 > > UK.

tl;dr UK politics as they relate to cryptos. Market Snap Market Wrap In the last six trading days over $1bn has flowed into spot BTC ETFs. We are now one month away from the next quarterly deadline fo

14th July 2024 > > The CCC is back!

tl;dr A criticism, an apology, a dig at the bureaucrats (we haven’t had one for a while), an unlikely wish, and the tantalising prospect of fully opening the doors to TradFi. Market Snap Market Wrap L

7th July 2024 > > TON.

tl;dr TON potentially presents an opportunity like no other. Market Snap Market Wrap I am not the only one who remains relentlessly optimistic about the price of BTC: Curious Cryptos’ Commentary – TON


bottom of page