Ether Hits 11-Month High As Shapella Gains Add Up Despite Over 1 Million ETH Withdrawals ⋆ ZyCrypto

• ETH surges over 10% post-Shanghai update, breaking past $2,100 for the first time in 11 months.
• A little over 1 million ETH worth $2.1 billion has been withdrawn from Ethereum’s Beacon Chain within five days of the Shanghai update. 
• How high can Shanghai push ETH? The ETH community is split down the middle as many believe other factors will determine the asset’s overall performance this quarter.

All eyes are now fixed on Ethereum (ETH) after the Shanghai upgrade, allowing validators to withdraw their staked assets from the network for the first time since the Merge.

ETH has continued to soar against all odds, with its price reaching a new milestone this year. ETH trades above $2,100 for the first time in 11 months after going on a nosedive last year following broader economic factors.

Trading over $2,100, ETH has gained over 10% in the last five days since the Shanghai update. ETH recorded a good run in Q1 2023 and has started Q2 with similar strength. Recovering from the turmoil of last year, the leading altcoin has spiked 74.28% year to date (YTD) but is still 30% down from its position a12 months ago.

While the rise is surprising to many who thought the withdrawal of staked ETH would lead to a loss in value, others saw a potential spark with the new development. CEO of blockchain development firm Labrys, Lachlan Feeney, views the surge as happening because validators are re-staking their ETH almost immediately after withdrawals.

“Much of the stake that has been withdrawn over the last few days is actually going straight back into The Beacon Chain as validators are looking to compound their interest. So much so that net stake is currently increasing,” he added. 

Feeney also stated that the amount of staked ETH will increase as investors feel safer in the wake of Shapella.

“Because Shapella is a massive de-risking event, over the medium to long term more, not less, ETH will be staked. We anticipate that in the not too distant future, we will reach a record high of Ether being staked.”

More than 1 million ETH withdrawn

After the Ethereum Merge, which saw the blockchain transition to a proof-of-stake network last year, validators began staking to process transactions and have locked over 18 million ETH. In the past five days post-Shapella, 1.03 million ETH worth $2.1 billion has been withdrawn from 473,000 requests, according to data from Beaconcha.in.

Although it can be seen that validators are re-staking their assets, all ETH withdrawn from Kraken’s U.S. platform are exempted following a settlement with the Securities and Exchange Commission (SEC).

Before Shapella, on-chain intelligence firm Glassnode estimated 170,000 to be withdrawn in the first week of the upgrade. The number of withdrawals has long exceeded the mark drawing up many speculations.