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Less than 1% of Expected ETH Stake Sold After Shanghai Upgrade: Glassnode

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According to Glassnode, around 170,000 Ether $1,870 of the total 18.1 million ETH invested in Beacon Chain will be released in the first week of the Shanghai hard fork being conducted on Ethereum.

According to an on-chain intelligence platform report on April 11, that amount will include 100,000 Ether ($190 million) in staking incentives and 70,000 ETH in Ether staking ($133 million) coming into the market. Glassnode supports its projections by explaining that only 253 depositors are waiting to sell their shares and that several procedures are in place to prevent a torrent of Ether supply from entering the market all at once.

The 253 depositors who left had a total of 1,229 validators, while another 214 withholding validators will be forced out as soon as Shanghai is activated on Ethereum with a minimum of 214 validators. “Even in the extreme case where the maximum number of prizes and shares were withdrawn and sold, sell-side volume was still in the range of the average weekly exchange inflow volume,” Glassnode said of the hard fork’s impact on Ether’s price action.

“As a result,” the business concludes, “even the most extreme cases will have an acceptable impact on the ETH price.” According to Glassnode data, only 22% of the current 253 depositors are profitable. Glassnode expects a significant amount of Ether to be taken from crypto exchange Kraken after the US Securities and Exchange Commission disputed the legality of its staking service. (SECOND).

It is also predicted that the cryptocurrency lending site Celsius will withdraw a large amount of money to liquidate the Ether it stakes as part of its bankruptcy procedures.

However, Kraken and Celsius are unlikely to make this withdrawal soon after Shanghai is triggered, according to the report.

The average deposit price across all staked ETH was $2,136, down 12.7% from Ether’s current price of $1,865, resulting in an unrealized net loss of $4.7 billion, according to Glassnode: “After a peak of $16 unrealized losses billion in July 2022, unrealized net losses now total $4.7 billion.” It was mostly brought in by depositors the size of the Pope, who accounted for 76% of the unrealized losses.”

Fidelity Investments, a global financial firm, believes that Shanghai will have little impact on Ether’s price action. According to a study released on April 5, “selling pressure will be dampened due to the possibility of a partially staked draw back as well as the length of time the drawdown will last.”

According to blockchain infrastructure startup Blocknative, the Shanghai upgrade will go into effect on April 12 at 10:30 pm UTC. Ethereum Improvement Proposal-4895 will enable unlocking of Ether staking. This is the most anticipated of the five EIPs to be activated by Shanghai, as it will bring Ethereum one step closer to a fully functional proof-of-stake system.

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