As ETH staking deposits outnumbered withdrawals, the amount of staked ether increased to 19.55 million, a new record.
According to a report from blockchain analytics company Nansen, the Shanghai upgrade, which enabled staking redemptions for the first time, resulted in a “non-event” in terms of the selling pressure of ether (ETH), Ethereum’s native token.
Since the Shanghai upgrade, which signalled Ethereum’s complete switch to a proof-of-stake blockchain, deposits of ETH have outpaced withdrawals, pushing the total amount of ETH staked to 19.55 million at press time, a new record. In light of this, the May 8 report noted “that the elimination of unstaking risks has thus far offset selling pressure from withdrawals.
Crypto bulls and bears engaged in extensive discussion about the market’s potential reaction following the upgrade in the weeks leading up to Shanghai. Since April 13 when Shanghai went live, the price of ETH has dropped by about 8% to $1,851, according to data from CoinDesk. In the same time frame, the CoinDesk Market Index, which is used to gauge the overall performance of the digital asset market, has decreased by almost 10%.
The Nansen report states that “finally, withdrawals have been modest and have thus far been matched by inflows, signalling strong overall confidence from investors in the network and the asset itself.
While centralised exchanges (CEXs) like Kraken and Coinbase received about 73% of the ETH withdrawn from staking, the majority of withdrawn ETH is actually CEXs withdrawing ETH to themselves.
“This means that the majority of ETH being sent to CEXs is not primarily for selling, but for the exchange’s internal operations,” says Nansen.