Restakers Put Ethereum Back on Track After Shapella Upgrade

The dust has started to settle down for Ethereum since its significant Shapella upgrade on April 12. Ethereum lost more than a million ETH following the successful conclusion to the Shapella episode. However, the potential of a massive sellout is finally receding.

For the first time since April 12, the Ethereum blockchain has experienced a paradigm shift. Ethereum staking surpassed withdrawals on Tuesday, which happened for the first time since Shapella upgrade.

Risk of Potential ETH Mass Sellout?

As speculated, the massive withdrawal of over a million by the Beacon Chain raised eyebrows in the crypto market.

Many looked at it as a potential make-or-break situation for Ethereum and related cryptocurrencies. It emanated from the potential risk of mass offloading of unlocked ETH.

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The Reversal of Fortune for ETH

While crypto enthusiasts feared a massive sellout after the Shapella upgrade, they might not have to fret over it anymore. The latest data from on-chain analytics firm Nansen has revealed that more ETH is being staked than withdrawn since April 12.

The Nansen report stated that by April 17, 2023, the volume of staked ETH touched 124,000 ETH, which was much more than the withdrawal volume of 64,800 ETH. The trend is getting strengthened with each passing day as 94,968 ETH were staked in the last 24 hours as against the withdrawal of 27,076 ETH.

At present, it takes around three days to enter the withdrawal queue. This shift in trend could be attributed to the fact that a majority of validators are choosing to restake their unlocked ETH instead of selling it.

Ethereum Price Gets Bolstered

It also strengthened the influence of ETH’s price, with the average price of staked ETH being around $2,137. Some early withdrawals may be staking rewards, while a few validators, such as Kraken, may have exited to comply with regulatory rulings from the United States Securities and Exchange Commission.

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Currently, 22,231 validators have signed up for a complete exit out of 574,624, while 910,930 ETH out of the 18.6 million staked ETH is slated to be withdrawn.

The Final Word

The Ethereum blockchain has shown a significant shift in trend since the Shapella upgrade on April 12. Initial fears of a potential mass sellout of unlocked ETH have subsided as more ETH is being staked than withdrawn.

It appears that a majority of validators are choosing to restake their unlocked ETH instead of selling it. This has contributed to the reversal of fortunes for Ethereum after the Shapella upgrade.

While some early withdrawals could be staking rewards, a few validators exited to comply with regulatory rulings from the United States Securities and Exchange Commission. One of them was Kraken.

This indicates the risk of a potential mass sellout of unlocked ETH has somewhat diminished. It also signals that the Ethereum blockchain is putting ETH back on track after the Shapella upgrade.