- In a recent tweet from Raoul Pal, due to “the tax season plus Blur farming”, the prices of CryptoPunks have come under pressure
- Pal argued that as the price of $ETH rises over time, excess gains will become recycled into trophy assets. This might be the time to buy some NFTs
- After the Shapella upgrade, 16.6% of Ethereum network validators have yet to update their validator credentials
- It might “take roughly 100 hours (or 4 days) for the network to run through and update the withdrawal credentials for the complete validator set of Ethereum
“Punks are starting to get very interesting…” Says Raoul Pal, the CEO of Global Macroinvestor.com. But, Punks are not the only one getting interesting, in fact, Ethereum price action is about to get exciting too fueling NFT prices.
In a recent tweet during the weekend, the Macroinvestor CEO mentioned that due to “the tax season plus Blur farming”, the prices of CryptoPunks, a blue-chip non-fungible token (NFT) collection have come under pressure.
In the tweet, Pal mentioned that while this NFT collection has held up in dollar terms around $100,000, the recent rise in Ethereum’s price has caused some degree of distress among the holders of these NFTs.
However, Pal argued that as the price of $ETH rises over time, excess gains will become recycled into trophy assets, with a lag. He says that this also happens with traditional art, “when stock markets have been strong”.
CryptoPunks, NFTs and Traditional Art
According to a tweet from CrayZ, a commenter under Pal’s tweet, the prices of Traditional art rise as fiat supply expands, leading to a linear correlation between both.
He mentioned that the reverse is the case for NFTs, because Ethereum is deflationary, and the prices of NFTs will trend downwards in terms of ETH over time.
Pal, replying to the tweet, said that ‘as ETH gains grow, holders tend to buy “assets” even in a deflation, even only for social signalling”.
This is true, according to the comments. However, it makes one wonder how many cycles that might work through before a perpetual NFT bear market starts.
The global crypto market has lost almost $30 billion in the last three days, according to CoinMarketCap. This places its total market cap at around $1.266 trillion.
Bitcoin (BTC) is currently trading around $29,900, up 8.65% from the previous week, after hitting $30k, which is the highest point it has reached this year and since June 2022.
Similar to BTC, ETH has increased by over 12% in the last week and now trades around $2,100.
Because of the pressure on ETH, now may be a good time to buy some CryptoPunks, according to Raoul Pal’s tweet.
Post-Shapella Ethereum Withdrawals and Deposits
The developers in charge of the Shapella upgrade have once again demonstrated that it is feasible to modify crucial components of a fully-operational network like Ethereum, with the most recent Shapella version already in operation.
The last time something like this happened was in September of last year with the Merge that took Ethereum from Proof of Work to Proof of Stake.
However, this is not the case for the 16.6% of Ethereum network validators who failed to update their validator credentials.
At the time of writing, about 106,219 validators holding 246,579 Ethereum on the network have not been able to validate their licenses according to data from Nansen. This means that these validators will not be able to withdraw about $515 million at the present exchange rates from the system.
A network scan is used to automatically update the numbers of upgraded validators. For those who rely on these nodes, however, this results in longer wait times.
It might “take roughly 100 hours (or 4 days) for the network to run through and update the withdrawal credentials for the complete validator set of Ethereum,” according to estimates from Christine Kim, an analyst at Galaxy.
A partial exit occurs when a validator indicates they would like to receive rewards from their staked ETH. All incentives beyond the first 32 ETH deposit would be considered staking rewards by the network.
All incentives beyond the first 32 ETH deposit would be considered staking rewards by the network. full exit, the validator in this case just accepts the incentives before proceeding to continue verifying.
Full exits take their rewards and the initial stake, turn off the validator and promptly shut down the validator.
According to Nansen, 1,118,291 Ethereum and more than 31,166 validators have currently indicated a “complete departure.”
According to the chart above, Kraken accounts for a staggering 44.3% of the demand when looking at the organizations that have said they may leave the network.
This centres around the recent actions taken recently against Kraken to shut down its staking service in the United States.
Lido also revealed on Thursday that its first credential update was successful. Overall, Shanghai seems to have been another smashing success for Ethereum.
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