After the completion of the highly anticipated Shanghai upgrade in the early morning of Thursday in Asia, holders of Ethereum’s native token, Ether, have started withdrawing the cryptocurrency.
Almost 30 hours after the upgrade, nearly 240,000 ETHs have been withdrawn, while nearly 100,000 ETHs have been deposited. Currently, 1.01 million ETHs are waiting to be withdrawn, and Kraken, Coinbase, and Huobi are among the exchanges handling the withdrawals.
Kraken, which has recently suspended its staking service due to the SEC’s regulatory scrutiny, accounts for 63% of the withdrawals. Coinbase follows with 11%, and Huobi accounts for 5.1%. Lido, which accounts for 31% of the stake, has not yet opened withdrawals.
Analysts Expect Neutral Outcome For Ethereum Value
However, the price of Ethereum has remained stable, and analysts suggest that the withdrawals are in line with expectations. The Shanghai upgrade enables validators to withdraw their staked Ether, allowing them to earn a passive income through more tokens.
Jonathon Miller, managing director of Kraken Australia, said:
The withdrawal amount we are seeing is something we expected given that these stakers had committed their funds without a certain timeline for withdrawal.
According to Charlie McGlynn, who oversees decentralized finance trading at XREX, the current scenario does not indicate a significant rush to leave, and there will probably be a rise in new staking deposits soon.
However, daily system limits on how much staked Ether can be withdrawn could prevent a sell-off in the token. The Ethereum Foundation has set a limit of 115,200 withdrawals per day, which could limit the potential impact of withdrawals on the market.
While the CEO of Flowdesk, a crypto-financial service, warns that although Ether withdrawals may have a long-term negative impact on its price, unstaking is unlikely to result in a rapid and significant drop.
Ken Timsit, head of Cronos Labs, suggests that Ether stakers will monitor withdrawals after the Shanghai upgrade is completed and may potentially overreact if significant withdrawal demand exists.
Nevertheless, the withdrawals of Ether after the Shanghai upgrade have been in line with expectations, and the market has remained stable. Overall, the outcome is likely to be neutral, given that the upgrade has been priced into ETH’s value for some time.