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Less Than 1% of Staked ETH Estimated to Sell After Shanghai Upgrade: Glassnode

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

According to the on-chain intelligence platform’s April 11 report, the amount will include 100,000 Ether ($190 million) in staking incentives and 70,000 ETH in staked Ether ($133 million) hitting the market. Glassnode supported its projection by explaining that just 253 depositors are waiting to sell their stake and that a few procedures are in place to prevent a torrent of Ether supply from entering the market all at once.

The 253 leaving depositors possess a total of 1,229 validators, while another 214 slashing 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 “Even in the extreme case where the maximum amount of rewards and stake are withdrawn and sold, the sell-side volume still falls within the range of the average weekly exchange inflow volume,” Glassnode said of the hard fork’s impact on Ether’s price movement.

“As a result,” the business concluded, “even the most extreme case will have an acceptable impact on the price of ETH.” According to Glassnode data, only 22% of the 253 existing depositors are currently profitable. Glassnode expects a big sum of Ether to be taken from the crypto exchange Kraken after the US Securities and Exchange Commission disputed the legality of its staking services. (SEC).

It was also predicted that cryptocurrency loan site Celsius would withdraw a considerable sum in order to liquidate its staked Ether as part of its bankruptcy procedures.

However, Kraken and Celsius are unlikely to make these withdrawals as soon as Shanghai is triggered, according to the report.

The average deposit price across all staked ETH is $2,136, a 12.7% decrease from Ether’s current price of $1,865, resulting in a net unrealized loss of $4.7 billion, according to Glassnode: “After the peak unrealized loss of $16B in July 2022, the net unrealized loss now amounts to $4.7B.” It is mostly carried by Whale-sized depositors, who account for 76% of unrealized losses.”

Fidelity Investments, a global financial firm, believes that Shanghai will have little impact on Ether’s price action. According to a study issued on April 5, “selling pressure will be muted due to the possibility of partial withdrawals being re-staked as well as the length of time the withdrawals will take.”

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

 

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