It is not basically an update. It is an upgrade where the whole blockchain is changed, the code is changed, everything you can see in the ethereum is changed.
How will it affect the current ETH holders?
There will be less ethereum produced by each block and that could affect the price of ethereum too. Some people are saying there will be a serenity coin as to be a hardfork coin caused by the serenity update in ethereum hardfork but i don't know if that was only a rumour or true story.