Over 1 million Ethereum (ETH), worth $2.1 billion, has been withdrawn from Ethereum’s Beacon Chain within the first four days of the Shapella hard fork. This has caused Ether to push past $2,100 for the first time in 11 months, with a rise of nearly 10% since the upgrade. The 1.03 million ETH withdrawals have come from 473,700 withdrawal requests, with the largest withdrawal day being on April 15 at 392,800 ETH. Nearly 87% or 469,000 of the 540,000 active validators are now able to withdraw their staked Ether.
Lachlan Feeney, the CEO of blockchain consulting and development firm Labrys, stated many validators are re-staking Ether back onto the Beacon Chain, and much of the stake that has been withdrawn over the last few days is going straight back into the network as validators are looking to compound their interest. Feeney said that given the current macroeconomic climate, many early stakers wanted to liquidate their assets after waiting nearly 30 months.
Markus Thielen, the head of research at digital asset platform Matrixport, told Cointelegraph that the closure of crypto exchange Kraken’s staking services may have contributed to the higher withdrawal figures. He expects a large number of un-staked Ethereum from Kraken to be “recycled” back into the network through other entities. Thielen said he thinks Shapella will ultimately attract more institutional investors to stake on Ethereum, aiding in the network’s growth.
Over the mid to long-term, Feeney believes the Shapella hard fork will only increase the amount of Ether staked, which will only strengthen Ethereum at the consensus level. “Because Shapella is a massive de-risking event, over the medium to long-term, more, not less, ETH will be staked. We anticipate that in the not too distant future, we will reach a record high of Ether being staked,” Feeney said.
The 1 million milestone is a 500% increase from an April 11 prediction by blockchain intelligence firm Glassnode, which estimated only 170,000 Ether would be un-staked after the first week of Shapella. On-chain analytics firm Nansen slightly overshot the mark, predicting 1.4 million Ether would be withdrawn after the first few days of Shapella.
Thielen anticipates the positive price action to cool off this week amid increased selling pressure. He thinks Shapella will ultimately attract more institutional investors to stake on Ethereum. In the meantime, there have been numerous strategies for staking Ethereum that have been put forward.
The Shapella hard fork is designed to improve the network, and many in the Ethereum community have been split on what impact it will have on the price of Ether. The first four days have produced close to a 10% rise, and it will be interesting to see if this trend continues in the coming weeks. Regardless, many believe that the hard fork will have positive long-term effects on the network, and this could ultimately help Ethereum to grow and become an even more valuable asset.