Proof of Stake
Ethereum Ecosystem Weekly Update
BitOoda Proof of Stake Research, 2/22/23
Vivek Raman
This week, BitOoda published its analysis of the upcoming Ethereum hard fork, titled “Ethereum Withdrawal Symptoms: Shanghai Fork. These are the Times That Try Bulls’ Souls.” The report concludes that despite our long-term belief in the Ethereum ecosystem, the next several months could be volatile due to sell pressure from pent-up unstaking and selling activity. We conclude that it may make sense to hedge ETH holdings via downside puts, or, more generically, by owning volatility.
The report analyzes what withdrawal flows could look like post-Shanghai and measures the amount of staked ETH that has been illiquid (i.e., not staked via Lido, our proxy for liquid staked ETH), and we map staked ETH over time and by price at time of staking.
As a result, we arrive at the amount of illiquid staked ETH that is “in the money” at current prices vs “out of the money” – this allows us to present scenarios of who may sell their illiquid staked ETH vs who may hold or re-stake their ETH.
Finally, since ETH withdrawals are limited by a daily cap, we show the potential effect on ETH price with various amounts of ETH exiting and selling per day and the amount of fiat inflows needed to sustain price. The conclusions are summarized in the tables below; please reach out to us for the full report.
This report is a balanced perspective to highlight potential market implications over the next several months. Although we think ETH is the base layer for crypto, prices could disagree for some time.
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This week, BitOoda published its analysis of the upcoming Ethereum hard fork, titled “Ethereum Withdrawal Symptoms: Shanghai Fork. These are the Times That Try Bulls’ Souls.” The report concludes that despite our long-term belief in the Ethereum ecosystem, the next several months could be volatile due to sell pressure from pent-up unstaking and selling activity. We conclude that it may make sense to hedge ETH holdings via downside puts, or, more generically, by owning volatility.
The report analyzes what withdrawal flows could look like post-Shanghai and measures the amount of staked ETH that has been illiquid (i.e., not staked via Lido, our proxy for liquid staked ETH), and we map staked ETH over time and by price at time of staking.
As a result, we arrive at the amount of illiquid staked ETH that is “in the money” at current prices vs “out of the money” – this allows us to present scenarios of who may sell their illiquid staked ETH vs who may hold or re-stake their ETH.
Finally, since ETH withdrawals are limited by a daily cap, we show the potential effect on ETH price with various amounts of ETH exiting and selling per day and the amount of fiat inflows needed to sustain price. The conclusions are summarized in the tables below; please reach out to us for the full report.
This report is a balanced perspective to highlight potential market implications over the next several months. Although we think ETH is the base layer for crypto, prices could disagree for some time.
Purpose
This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda.io.
Analyst Certification
Vivek Raman, denoted by an “AC” on the cover of this report hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships.
Conflicts of Interest
This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation.
General Disclosures
Any information (“Information”) provided by BitOoda Holdings, Inc., BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or on or through http://www.bitooda.io/, including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such. BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties (express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information.
The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance.
Ooda Commodities, LLC is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
BitOoda Technologies, LLC is a member of FINRA.
“BitOoda”, “BitOoda Difficulty”, “BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc.
Copyright 2022 BitOoda Holdings, Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda.
This week, BitOoda published its analysis of the upcoming Ethereum hard fork, titled “Ethereum Withdrawal Symptoms: Shanghai Fork. These are the Times That Try Bulls’ Souls.” The report concludes that despite our long-term belief in the Ethereum ecosystem, the next several months could be volatile due to sell pressure from pent-up unstaking and selling activity. We conclude that it may make sense to hedge ETH holdings via downside puts, or, more generically, by owning volatility.
The report analyzes what withdrawal flows could look like post-Shanghai and measures the amount of staked ETH that has been illiquid (i.e., not staked via Lido, our proxy for liquid staked ETH), and we map staked ETH over time and by price at time of staking.
As a result, we arrive at the amount of illiquid staked ETH that is “in the money” at current prices vs “out of the money” – this allows us to present scenarios of who may sell their illiquid staked ETH vs who may hold or re-stake their ETH.
Finally, since ETH withdrawals are limited by a daily cap, we show the potential effect on ETH price with various amounts of ETH exiting and selling per day and the amount of fiat inflows needed to sustain price. The conclusions are summarized in the tables below; please reach out to us for the full report.
This report is a balanced perspective to highlight potential market implications over the next several months. Although we think ETH is the base layer for crypto, prices could disagree for some time.
Purpose
This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda.io.
Analyst Certification
Vivek Raman, denoted by an “AC” on the cover of this report hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships.
Conflicts of Interest
This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation.
General Disclosures
Any information (“Information”) provided by BitOoda Holdings, Inc., BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or on or through http://www.bitooda.io/, including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such. BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties (express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information.
The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance.
Ooda Commodities, LLC is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
BitOoda Technologies, LLC is a member of FINRA.
“BitOoda”, “BitOoda Difficulty”, “BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc.
Copyright 2022 BitOoda Holdings, Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda.
In this report, we offer a variety of institutional frameworks to analyze ETH, alongside BTC, as a part of a diversified crypto portfolio. Bitcoin has transcended into the mainstream, accelerated by the acceptance of spot BTC ETFs. ETH, while more complex, has unique use cases that could position it as a premier crypto asset alongside BTC.