Over the first four days of the Shapella hard fork, almost 1 million Ether (ETH) worth $2.1 billion was removed from Ethereum’s Beacon Chain, and Ether has surpassed $2,100 for the first time in 11 months.
About 87%, or 469,000 of the 540,000 active validators, can now withdraw their staked Ether. While the Ethereum community was divided on the influence, Shapella might have on the price of Ether, the first four days saw a 10% increase.
According to Lachlan Feeney, CEO of blockchain consulting and development business Labrys, instead of being sold, a considerable percentage of the withdrawn Ether is being restaked back onto the Beacon Chain as validators attempt to compound their income.
The largest Ether withdrawals to date occurred on April 15 and 16, when 392,800 and 280,400 Ether were removed from Beacon Chain, respectively.
In the price chart by CoinMarketCap, the rapid price increase of ETH this month since the launch of Shapella is evident.
The 1 Million ETH Milestone:
According to Lachlan Feeney, chief executive of blockchain consulting and development firm Labrys, the Shapella hard fork is a “huge de-risking event” for Ethereum. He also believes that it will likely result in more, not fewer, ETH being staked in the medium to long term. He predicts that Ether staked on the Beacon Chain will hit a new high in the coming future, increasing Ethereum’s consensus level even higher.
When Kraken’s staking services were discontinued, investors who were staking on Kraken may have relocated their cash to other organizations to restake on the Beacon Chain, according to Markus Thielen, Head of Research at digital asset platform Matrixport.
Thielen also believes the favorable price action may drop off in the coming week due to greater selling pressure. However, the Shapella hard fork will eventually entice more institutional investors to stake in Ethereum.
The 1 million Ether withdrawals from the Beacon Chain represent a huge rise over prior forecasts by blockchain analytics startup Glassnode, which predicted that 170,000 Ether would be unstaked after Shapella’s first week. Nansen, an on-chain analytics business, predicted 1.4 million Ether would be withdrawn in the first few days of the hard fork.
The Impact of Shapella: Will The Change Last?
The consequences of the Shapella hard fork extend beyond the immediate withdrawals and restakers of Ether.
It emphasizes institutional investors’ growing interest and participation in Ethereum’s staking ecosystem, signaling a maturing market. It also highlights the ongoing need for staked position liquidity, with investors seeking greater visibility and flexibility in managing their staked Ether.
The Shapella hard fork has drawn much attention to the metaverse and the crypto sector, with Ethereum’s Beacon Chain seeing record amounts of withdrawals and restaking. While there may be short-term price changes, the long-term impact is projected to be favorable, with more Ether staked and Ethereum’s consensus level strengthened.
Also Read: Ethereum’s Shanghai Upgrade: Everything You Need To Know About This New Era Of Staking Withdrawals
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