The upcoming Shanghai upgrade on the Ethereum blockchain, scheduled to begin on 12th of April 2023, will unlock 17 million ETH tokens, which is causing excitement in the Ethereum community. However, some predict that there could be short-term negative impacts on the crypto market due to the large influx of tradable ETH tokens worth over 32 billion USD.

Crypto influencer Crypto Tony suggested that the market could experience a massive dump. On the other hand, confirmed reports indicate that the unlocking process is dynamic, meaning the wait time for withdrawal is dependent on the number of validators leaving the network.

Exiting validators would have to go through an exit queue and withdrawal period, with a waiting period ranging from 27 hours to 36 days, depending on the circumstances. The longer waiting period is meant to discourage bad actors. Overall, the long-term effects of the Shanghai upgrade are expected to be favourable for the crypto market.

The Shanghai Upgrade is a forthcoming hard fork of the Ethereum protocol. A hard fork implies that the previous version will not be compatible with the updated one. According to Pooja Ranjan, the founder of EtherWorld.co, nodes that do not upgrade will no longer engage in staking and validation activities

Furthermore, the Consensus Layer will undergo modifications through the Capella Upgrade, which will accompany the Shanghai Upgrade, leading to the name "Shapella." However, the CEO of CoinFlip, Ben Weiss, has remarked that the Shanghai Upgrade is a relatively minor upgrade in comparison to the merge that occurred in the fall of last year.

Sources:

https://www.investing.com/news/cryptocurrency-news/shanghai-upgrade-to-unlock-17m-eth-next-week-what-to-expect-3049224

https://coinedition.com/shanghai-upgrade-to-unlock-17m-eth-next-week-what-to-expect/

https://coinmarketcap.com/community/articles/642d2013fc99f652d14bbe97/

https://www.forbes.com/advisor/investing/cryptocurrency/ethereum-shanghai-upgrade/