ETH Withdrawals Hit 1M Post-Shapella Upgrade; Price surged 15%

The first four days after Ethereum Shapella Upgrade saw 1 Million ETH worth $2.1 Billion withdrawn from Beacon Chain. Moreover, Ether climbed almost 15% post-upgrade and crossed the $2,100 mark in 11 months. At the press time, ETH traded at $2,095.80, gaining 0.88% in the last 24 hours.

Staking Withdrawals Began After Shapella Upgrade

Ethereum Shapella Upgrade facilitated un-staking ETH, which was feared to start massive selling pressure. However, reports suggest that ETH withdrawals would be limited to 1,800 validators per day. Considering 32 ETH per validator, the withdrawal could be around 57,600 ETH per day; this brings the selling pressure to approximately $120 Million. Around 875,325 ETH is expected to go for a full exit, worth approx. $1.83 Billion.

The data shows that most withdrawals occurred on April 15, around 392,800 ETH. Still, multiple requests are pending on the network, with an average waiting time of 3 to 6 days. The upgrade allows nearly 87% of the active validators to withdraw their staked Ether.

After-effects of Ethereum Shapella Upgrade on the Network

The crypto community was ambiguous regarding the after-effect of the Ethereum Shapella Upgrade. Some analysts predicted a price drop, while some predicted a short hike might be visible. But surprisingly, ETH rallied almost 15% post-upgrade. This was the highest point in the last 11 months.

Lachlan Feeney, Chief Executive of Labrys, a blockchain consulting and development firm, hinted that many validators are re-staking back on Beacon Chain. This could be done for interest compounding, and if so, many more validators could be re-staking their withdrawals back on the platform. Hence, this would gradually increase the net stake over Beacon Chain.

Feeney also suggested that early stakers want to withdraw and liquidate according to the current global macroeconomic climate, as many have been waiting since the Merge.

However, 30% of staked ETH reportedly are at an average loss of $1,000.

The swinging of validators between un-staking and re-staking, Feeney further added, is supposed to increase the amount of staked ETH. If this happens, the consensus level of the network will be more substantial. Moreover, the supposed risks involved in this process are minimal. Hence the network might reach a record-high number of staked ETH.

While speaking to the media, Markus Theilen, the Head of Research at Matrixport, a digital asset platform. Argued that the recent closure of crypto exchange Kraken’s staking services might be the cause of increased requests. There is a possibility that the un-staked ETH from Kraken might end up on Beacon Chain. However, this effect is supposed to be temporary, as investors are deviating towards liquid staking positions.

Thielen suggests that this upward rally will not continue as selling pressure rises in a week. Moreover, the Shapella Upgrade should attract more staking on ETH from institutional investors.

Before the upgrade, analysts predicted that after Shapella, the withdrawals would reach around 170,000 ETH in a few days. But this 1 Million milestone is a 500% increase.

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