Unlocking the Ether Lockdown
Ah, the much-anticipated Shanghai/Capella hard fork! On April 12, 2023, Ethereum will take a leap towards a more liquid future. But don’t go prepping your champagne just yet; only 170,000 ETH of the 18.1 million ETH staked will be put on the withdrawal list right away.
This figure breaks down to 100,000 Ether in rewards (worth around $190 million) and 70,000 ETH (approximately $133 million) in actual staked Ether, according to Glassnode. In other words, it’s like unlocking a tiny candy jar after a long fasting; minimal but hopeful.
The Stakeholders Behind the Curtain
While it might sound like a flood of Ether locked up for eons will suddenly burst free, hold your horses. Only 253 depositors are keen on pulling their stakes out of the system. But that’s not just any random pool of users; these savvy traders hold 1,229 validators in total. Talk about a healthy exit!
- Minor Flooding: The Ethereum network has built mechanisms to manage this withdrawal process gradually, ensuring it doesn’t behave like a tidal wave crashing into the market.
- Profitability Check: Curiously, only 22% of those looking to exit are actually in profit. You know the phrase ‘underwater with your investments’? They might be clutching onto their floaties.
Will Kraken and Celsius Ride the Withdrawal Wave?
Among the big players, Kraken and Celsius have been eyeing this upgrade with curious glances. Glassnode suspects that Kraken’s staking services might withdraw a decent part of their assets, especially since their legality is dancing on a knife’s edge with the SEC yelling “boo!” But will they do it at the first opportunity? Not quite.
Celsius could also show up to the party with their staked Ether looking to cash in, but the reality of their bankruptcy proceedings will likely delay any hasty withdrawals.
Unrealized Losses and the Long Game
Let’s face it, the average deposit price for staked ETH is around $2,136. But here we are, with Ether’s current price hovering at approximately $1,865, which leads to a net unrealized loss of $4.7 billion—yikes! Smaller investors might be sweating, while the whales are casually holding 76% of these unrealized losses like they’re just waiting for the right moment to strike.
The Ripple Effect on Ether’s Price
Optimism is in the air! Financial firms like Fidelity claim that the selling pressure from this mass unlocking will remain relatively muted. Post-activation, many investors are expected to re-stake their Ether, mirroring a toddler reluctant to leave their toy behind.
According to Blockchain infrastructure firm Blocknative, all of this culminates into a drama-filled performance at 10:30 PM UTC, marking Ethereum’s exciting transformation into a more refined and functional proof-of-stake system. Everyday users and crypto enthusiasts alike are holding their breaths and moderately betting on what happens next!
