Ether prices should be pumping this week in anticipation of the Shapella upgrade occurring on April 12. The upgrade, which makes it possible for investors to unstake their tokens, is supposed to catalyze prices by enabling investors to sell their ether or stake it, once again, on the cryptocurrency’s network.

But the expected price bump is not happening. While they swept past the $1,900 mark briefly last week, ether prices are down currently to $1,855.74, relatively unchanged from a day earlier. Meanwhile staking yield for ether has declined by 0.5% to 4.3% from a week earlier. For context, the federal funds rate is currently between 4.75% to 5%, making an investment in treasuries more attractive than ether.  

An Investment Case for Ether

Things don’t look good for Ether. Appearing on CoinDesk this morning, Brian Mosoff, chief executive officer at Ether Capital, said the enabling of ether withdrawals during the Shapella upgrade will unlock a new group of investors for the token and act as a catalyst for new structured products involving it.

But the current situation makes it difficult to make an investment case for the token. Mosoff admitted as much in an interview a year ago when he said that the market was “ways off” from trying to value ethereum. Fees, the only seeming source of cash flow for ether, have dried up as the market for NFTs has cratered.

A Belief in Ethereum

Ether capital has a lot riding on Ethereum. The Toronto-based firm was launched in 2018, in the middle of a crypto winter, and is bullish on the token. It has staked 79.4% of its total holding or 36,000 Ether. Forty three percent of that figure was staked this year in January, when ethereum yields spiked to above five percent.

In an investor presentation, the firm said its staked ether had yielded 5.6% till date this year.

Ether Capital had more than 45,550 Ether on its balance sheet at the end of last month. 20,500 Ether, yielding 4.67% per annum, was staked by the company then. During his appearance this morning, Mosoff told interviewers that his firm was a long-term believer in the token and did not intend to sell its holdings after unstaking ether.  

That is a reversal from its position last quarter, when he talked about “moving closer” to liquidity for staked ether. “At this point, we have no ability to sell off that staked ether,” he said. Ether’s declining price, declining liquidity, and the staggered process for withdrawals will further constrain that ability.