The much-anticipated selling pressure of Ethereum’s native token, ether (ETH), following the Shanghai upgrade turned out to be a “non-event,” according to a report by blockchain analytics firm Nansen. This upgrade enabled staking redemptions for the first time and marked Ethereum’s full transition to a proof-of-stake blockchain. Since then, over a month has passed, and ETH staking deposits have surpassed withdrawals, pushing the number of staked ETH to a new all-time high of 19.55 million at the time of writing. The report also stated, “The elimination of unstaking risks has thus far offset selling pressure from withdrawals.”
As the Shanghai upgrade approached, the crypto community’s bulls and bears engaged in heated discussions about the potential market response following the upgrade. To date, ETH prices have dropped about 8%, settling at $1,851, while the CoinDesk Market Index, which measures the digital asset market’s broad performance, has fallen nearly 10%. Nevertheless, the Nansen report highlighted that minimal withdrawals matched inflows, signaling strong overall confidence from investors in the network and the asset itself.
As for crypto exchanges, Kraken, which ended its crypto staking-as-a-service platform for U.S. customers in compliance with SEC regulation, showed the most withdrawals with over 646,000 ETH. Coinbase, a rival crypto exchange, followed with more than 376,000 ETH. Interestingly, about 73% of the ETH withdrawn from staking went to centralized exchanges (CEXs) like Kraken and Coinbase.
However, the majority of withdrawn ETH were from CEXs withdrawing ETH to themselves. According to Nansen, “This means that the majority of ETH being sent to CEXs is not primarily for selling, but for the exchange’s internal operations.” This observation adds another dimension to the ongoing discussions in the crypto community and puts a more optimistic spin on Ethereum’s future prospects.
As Ethereum continues to evolve, and the market responds to the changes, investors in the network and the asset will need to keep a close eye on these developments. The elimination of unstaking risks may indeed offset selling pressure, but emerging internal operations in crypto exchanges could present a new dynamic for enthusiasts to consider. The continuously changing landscape of the cryptocurrency and blockchain industry promises to keep both supporters and doubters on their toes, eagerly waiting for the next development.
Source: Coindesk
