Ethereum's Shanghai upgrade led to a record-breaking weekly inflow of 572k ETH deposits for staking, worth over $1 billion, mainly driven by institutional staking service providers and investors reinvesting rewards after withdrawal. The top five institutional-grade staking service providers staked a total of 235,330 ETH combined, worth around $450 million. The increased interest highlights that enabling withdrawals from Ethereum's proof-of-stake chain has significantly reduced the liquidity risk associated with locking up tokens. Investors also chose to restake a large part of the withdrawn rewards, reducing sell pressure and potentially a positive sign for ETH price.
Ether (ETH) has fallen to its lowest price since April 9, erasing all gains from its recent rally following the successful implementation of the Shanghai upgrade. The cryptocurrency has declined over 13% from a Tuesday high of $2,118 and fallen 5.3% over the past 24 hours, amid wider market uncertainty. Bitcoin has also fallen over 10% from a high above $30,000 on Tuesday, as concerns around inflation, stock market earnings, and recession weigh on crypto markets.
Nearly 80% of the Ethereum staking rewards have been withdrawn since the Shanghai upgrade, with 1.5 million ETH ($2.8 billion) withdrawn since April 12, 2023. Only about one-third of the withdrawals involved the complete exit of the 32 ETH stack, while the other two-thirds involved only the exit of the staking rewards. The majority of the rewards accumulated prior to the hard fork have already been withdrawn, and any extraordinary selling pressure coming into the market should already be almost entirely exhausted.
Crypto exchanges received a net inflow of 179,500 ETH, worth $375 million, in the four days after Ethereum's Shanghai upgrade went live, according to CryptoQuant. The largest four-day net inflow in a month, this indicates that traders are preparing to sell, which may lead to a price decline. Since the upgrade, some traders have sold ETH during the price rally post-Shanghai. Coinbase recorded $28 million more sell orders than buy orders, and Binance's upcoming withdrawal feature could result in more sell pressure for ETH.
Ethereum co-founder Vitalik Buterin has urged the crypto community to address the network's scaling issues before the next bull run, warning that failure to do so could result in users paying high transaction fees. The call comes as the ethereum price surged past $2,000 per ether, boosted by the long-awaited Shanghai upgrade and increased interest from institutional investors. The upgrade has also allowed those who had staked ethereum to the blockchain to withdraw it, potentially adding liquidity to the market and de-risking digital asset allocations for institutional investors.
Ethereum's price surged 7% to an 11-month high of $2,123.35 following the successful completion of the Shanghai hard fork, which allows for the withdrawal of staked funds and staking on the Ethereum mainnet. The upgrade has also boosted confidence in staking-as-a-service offerings for financial institutions. Liquid staking platforms such as Rocket Pool, Lido DAO, and Frax Shares have seen significant price increases, enabling Ethereum holders to stake their ETH and receive a liquid staking token in return for generating additional yield within the DeFi ecosystem.
Ether options trading volume has surpassed Bitcoin for the first time in 2023, with nearly 60% of global crypto options activity and 50% more than Bitcoin's notional trading volume. The increased demand for Ether calls is evident from the short-term and long-term options skew, which have flipped positive, signaling a renewed bias for bullish call options. The latest pick-up in activity in the Ether options market comes on the heels of Ethereum's successful implementation of the highly-anticipated Shanghai upgrade on Wednesday, which has opened withdrawals of over 18 million Ether staked in the network since December 2020, de-risking staking.
Ether's price surged over $2,100, up more than 11% over the past 24 hours, after the Ethereum Shanghai upgrade, while bitcoin also rose toward $31,000. The mass unlock of staked ETH that some crypto market observers predicted did not occur, and the prospects for Ethereum and liquid staking derivatives are encouraging. The completion of the upgrade signals reduced risk, increased liquidity, and brought an uptick in asset value. Many ether stakers have decided to hold onto their coins, and the outlook for the price of ETH is an open question.
Ethereum's rally above $2,000 after the successful Shanghai upgrade has reduced Bitcoin's dominance rate from an almost two-year record high, according to TradingView data. The last time the metric was around the 49% level happened in July 2021, some 21 months ago. Ether's improved performance has reduced Bitcoin's share of the crypto market, and the shift has come after the Ethereum network's long-awaited tech upgrade, also called Shanghai or Shapella, was deployed without a hitch late Wednesday.
Following the successful Shanghai upgrade, many Ethereum validators have requested to unstake their ETH from the blockchain, causing a backlog of about two weeks for withdrawals. The number of validators waiting for redemptions has grown to about 17,000 for full withdrawals and 285,000 for partial withdrawals. The Ethereum blockchain is processing withdrawals at just 55.4% of its capacity, and there are still more withdrawals than deposits. Coinbase, which holds about 12.6% of all staked ETH, will allow its users to decide if they want to unstake. ETH is up about 5% over the last 24 hours.
Ether reached an eight-month high of $1,994 following a successful network upgrade called Shanghai, which enabled withdrawals for users who have staked their ether. The demand for unstaking ether has been moderate, with the biggest unstaker being Kraken, which is shutting down its staking service for U.S. users. The selling pressure is likely to be less than what the market initially feared, according to North Rock Digital’s founder Hal Press. Ether has gained over 3% since the upgrade, while market leader bitcoin has added less than 2%.
Ethereum's native cryptocurrency, ether (ETH), remains unchanged after the highly anticipated Shanghai upgrade, with trading around $1,914, up 1.1% versus 24 hours earlier. Analysts were divided on potential price action, with some predicting increased sell pressure from fresh supply while others believed it may become a psychological battle. Brent Xu, CEO of cross-chain decentralized finance (DeFi) protocol Umee, stated that he didn't expect a big decline for ETH or related LSTs in the near future due to the momentum being too powerful and institutions holding ETH and LSTs.
Ethereum completed its Shanghai upgrade, also known as the Shapella upgrade, which allows holders to withdraw their locked-up coins for rewards. This upgrade could potentially affect the price of ether, the world's second-largest cryptocurrency.
The upcoming Ethereum Shanghai hard fork, which will complete the transition to a proof-of-stake consensus system, will establish benchmark interest rates for blockchain-based money markets and change the landscape for ether (ETH) token holders, according to Zhuling Chen, CEO of blockchain services company RockX. The upgrade will make it easier to participate in the network's validation process while increasing security, lower fees and create more room for the network to handle more transactions. Chen said institutional investors see the event as more of a "trust vote" in the future of the blockchain.
