These altcoins are likely to trigger a massive rally after Ethereum's Shanghai upgrade
- Ethereum's Shanghai upgrade on February 29 will enable withdrawals of the staked ETH but on a test network.
- Investors need to divert their attention from Shanghai update-linked ETH crash to a rally in LSDs.
- Some of the altcoins that could rally as a result of a successful testnet upgrade include LDO, RPL, FRX, ANKR, YFI and so on.
The crypto market seems to have shifted from exciting to boring since mid-February as Bitcoin price hit $25,250. Until this point, the altcoin season was in full effect. However, after struggling to flip the key hurdle, Bitcoin price is stuck in limbo – with no direction, causing some or majority of the altcoins to take a body shot.
Also read: Everything you need to know about Ethereum’s Shanghai hard fork and why it matters
Light at the end of the tunnel
But there is a light at the end of this bleak tunnel. Ethereum developers announced that the Shanghai testnet upgrade would go live on February 28 at epoch 56832. This update will test the withdrawal of staked ETH on the Sepolia testnet.
Wait, so if the testnet is successful, wouldn’t it cause the markets to tank from all the freely available ETH? How is this bullish?
Well, technically, yes, but actually, no. That is unlikely to happen.
While ETH withdrawal will increase the availability of tokens that could potentially be sold, yes. But the premise that will prevail is the one that already played out in the last two months – Liquid Staked Derivatives (LSD). The platforms that will benefit from this will include top staking platforms and their native tokens if any.
Some of the popular staking platforms or staking-related platforms that could see a renewed interest include
- Lido DAO (LDO)
- Rocket Pool (RPL)
- Frax (FRAX)
- Ankr Network (ANKR)
- Tranches (CHESS)
- SSV Network (SSV)
In addition to these tokens, investors should pay attention to Decentralized Finance (DeFi) tokens like
- Yearn Finance (YFI)
- Maker DAO (MKR)
Many investors have their eyes on LDO platform for its attractive net yields and incentives. Justin Sun, the founder of TRON network, recently staked a whopping $150,000 ETH on Lido DAO platform.
Today, @justinsuntron staked 150k $ETH through @LidoFinance (~0.9% of all staked ETH)
— hildobby (@hildobby_) February 25, 2023
This is now the highest week by staked amount in almost a year
Source: https://t.co/pHVPwKxIvC pic.twitter.com/n2lREjiHF4
Other narratives
Some other narratives that could propel a different section of altcoins include
- Layer 2 narrative – due to the entry of Coinbase into the race, tokens like Polygon (MATIC), Optimism (OP), ImmutableX (IMX), Loopring (LRC) and others are likely to explode.
- Artificial Intelligence (AI) based tokens – Ever since Google announced ChatGPT competitors, altcoins remotely related to AI have rallied. The AI race has already kicked-off leaving Google in Microsoft’s rearview mirrors. So any major updates or announcements in this regard could see these altcoins shoot up.
- Zero-Knowledge (ZK) – while this narrative keeps popping up every year, there might be a comeback if the regulation tightens its grip around Ethereum and related projects. In such a case, ZK-based coins like MATIC, Mina Protocol (MINA), IMX, and ZCash (ZEC) could rally.
Other important reads:
-
What to expect from MATIC price with Polygon’s series of partnerships and upcoming zkEVM launch
-
Why the crypto China narrative is not bullish for Bitcoin and Ethereum prices
-
Coinbase enters the L2 race: Will this spell disaster for Arbitrum, Polygon and other Layer 2 solutions?
-
Why traders need to be aware of ChatGPT, Bing AI Chat inspired scam tokens on Binance’s BNB Chain
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
