- The third round of ETH withdrawals sees roughly equal amounts of deposits.
- Kraken, a cryptocurrency exchange, was responsible for a major share of these withdrawals.
- An all-time high in the total amount of staked ETH reached 18,879,775 ETH.
According to data from Nansen, a blockchain data and research firm, Ethereum staking withdrawals have entered the third round, with staking deposits almost equaling the current value of Ether, despite its price drop. The total amount of staked ETH reached an all-time high of 18,796,663 ETH on April 24, worth around $34.5 billion, before the latest wave of withdrawals began. This represents 14.5% of the total Ether supply, although the current figure is slightly lower due to the EIP-1559 burning mechanism, which has caused a decline of 114,077 ETH (around $209 million) since the Merge in September.
According to Nansen’s report, crypto exchanges Kraken and Coinbase account for over 78% of withdrawals, worth 870,688 ETH.
Kraken, a popular crypto exchange, was forced to suspend its Ethereum staking services in February after the SEC fined it for selling unregistered securities. As a result, much of the early ETH withdrawals were from Kraken accounts as assets were returned to stakes. Nansen posted on Twitter saying:
“Third round of principal withdrawals underway. Again largely Kraken, bringing their total principal withdrawn to almost 400k.”
Nansen said that Kraken still holds 2.3% of the total withdrawable ETH. The withdrawals started ramping up on April 24 and into April 25, and many of these were made by Kraken.
Significant Appetite For Staking Ether
Despite concerns over a potential massive exodus of staked Ethereum following the Shapella upgrade, Token Unlocks reported that 1.66 million ETH had been withdrawn since April 12, but 1.07 million ETH have also been deposited, showing that there is still a significant appetite for staking Ether. Nansen now claims that there are 632,651 ETH in the pending withdrawal queue, worth about $1.16 billion at current pricing.
Staking has become increasingly popular with Ethereum investors due to the recent price increase and the opportunity to earn passive income. Ethereum staking involves locking up ETH to help secure the network and validate transactions, and stakers are rewarded with ETH for their participation. The minimum requirement to stake Ethereum is 32 ETH, and various staking providers are available, including exchanges like Binance and Coinbase.
Possible reasons for recent Ethereum staking withdrawals
The recent withdrawals may be due to stakers cashing out their rewards or selling their staked ETH due to the current price drop. However, some stakers are also withdrawing their ETH to prepare for the upcoming Shapella upgrade, which will introduce significant changes to the Ethereum network.
The Shapella upgrade aims to improve the efficiency and sustainability of the Ethereum network by introducing a new transaction fee mechanism and reducing the issuance rate of new ETH. The upgrade will also introduce a new consensus mechanism, Proof-of-Stake, which will replace the current Proof-of-Work mechanism.
While there are concerns over a potential massive exodus of staked Ethereum following the Shapella upgrade, the fact that there is still a significant appetite for staking Ether suggests that many investors remain bullish on the long-term prospects of Ethereum.
