In the run-up to Shapella’s upgrade last month, many cryptocurrency experts speculated that activating stacked Ether withdrawals could cause the price of the original asset to drop.
But the recent data indicates that the selling pressure on ETH after the pullback has been “somewhat uneventful.” This is supported by the fact that deposits have roughly matched the amount of ETH being traded.
Ethereum State: Post Shapella
The Shapella app was crucial as it enabled stacked ETH withdrawals from the Beacon Chain for the first time. However, the event also raised concerns about unpegged ETH entering circulation which could lead to sustained selling pressure. On the other hand, the bullish view argued that the risk of not being able to withdraw has been eliminated, resulting in more deposits.
According to the latest Nansen a report Who analyzed the state of Ethereum post-Shapella, it was noted that the elimination of volatile risk has so far offset selling pressure from drawdowns. Moreover, it is likely that a large percentage of the withdrawn ETH is not intended for sale.
The report stated that the upgrade had no net effect on ETH.
“There is 19.3 million ETH, including rewards, on the Beacon Chain today, equal to the amount of ETH on the Beacon Chain during the time of the Shapella upgrade, which means it has had zero net impact on the network so far.”
Centralized crypto exchanges have taken control of withdrawal requests. Kraken, for example, is leading with its withdrawal volume accounting for over 26% of all ETH withdrawals since the upgrade. This is likely related to the recent regulatory crackdown on the US-based stock exchange betting service, which forced it to return hoarded ETH to depositors on its platform.
Other major ETH withdrawals include Binance, Coinbase, and Private Transactions Miner: 0xffd, withdrawing 13.3%, 12.5%, and 5.44% of the main ETH stake, respectively. – reads the report.
A month after the upgrade, withdrawals have slowed dramatically, and Nansen data indicates that the majority of entities are currently holding onto their remaining balance for the time being. Entities like Lido, Binance, Coinbase, Kiln, and Stakefish have accounted for deposits of more than 1 million ether over the past month.
withdrawal behaviour
Nansen reports that approximately 73% of the ETH withdrawn from the Beacon Chain so far has been sent to centralized exchanges. But, the majority of this is CEX siphoning ETH for themselves, which indicates that the majority of the token being sent to these entities is not intended for sale. Instead, these tokens are for the exchange’s internal operations.
By contrast, the amount of ETH sent to decentralized exchanges from enchanted is only 1.23% of the total. About 20% of the withdrawn ETH was found to have been sent to all assorted addresses that are not categorized as CEX, DEX, Staking, or DeFi, according to Nansen, and approximately 6% of all withdrawn ETH has been sent to return the stake.
Nansen believes that this group is unlikely to make a profit because it is still running validating nodes, and staking rewards are processed automatically. Therefore, some of the ETH from the partial withdrawals will go back to the Beacon Chain for a larger return.
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