It is estimated that 170,000 Ether (ETH) of the total 18.1 million ETH staked on the Beacon Chain will be unlocked in the first week of the execution of the Shanghai Ethereum hard fork, Glassnode predicted.
The figure comprises 100,000 Ether ($190 million) in staking rewards and 70,000 ETH in Ether staking ($133 million) the on-chain intelligence platform foretold in his report of April 11.
Glassnode backed up his prediction by explaining that only 253 depositors are waiting to exit their stake and that there are some mechanisms in place to prevent a rush of Ether supply from hitting the market in one fell swoop.
The highly-anticipated Shanghai/Capella hard fork is scheduled for April 12, 2023, allowing betting to be withdrawn #ethereal.
In this extended edition of Week On-Chain, we will assess the overall Ethereum staking landscape, develop a framework for establishing... pic.twitter.com/EVgsz3s6GG
- glass node (@glassnode) April 11, 2023
The existing 253 depositors own a total of 1229 validators, while another 214 reduced validators will be kicked out as soon as possible. Shanghai goes live on Ethereum with Glassnode confident that the hard fork will not have a "dramatic" effect Impact on Ether Price Action:
โEven in the extreme case where the maximum amount of rewards and stakes is withdrawn and sold, the volume on the sell side is still within the range of the average weekly trade input volume.โ
โTherefore, we conclude that even the most extreme case will have an acceptable impact on the ETH price,โ the firm added.
Data shared by Glassnode found that only 22% of the existing 253 depositors are also currently making a profit.
Glassnode expects a large amount of Ether to be withdrawn from the Kraken crypto exchange after the legality of its staking services were questioned by the United States Securities and Exchange Commission (SEC).
He also anticipated that crypto lending platform Celsius may withdraw a large amount to sell its staked Ether as part of your bankruptcy process.
However, Kraken and Celsius are unlikely to make these withdrawals as soon as Shanghai goes live, he said.
The average deposit price across all ETH staked is $2,136, down 12.7% from Ether's current price of $1,865, equating to a net unrealized loss of $4.7 billion, Glassnode said:
โAfter the peak unrealized loss of $16 billion in July 2022, the net unrealized loss now stands at $4.7 billion. It is carried mainly by whale-sized depositors, who have a 76% share of unrealized losses.โ
Global financial firm Fidelity Investments is also of the opinion that Shanghai will not have much of an impact on Ether's price action.
Related: Ethereum Price Turns Bullish Ahead of Next Week's Shanghai and Capella Updates
He explained in an April 5 report that "selling pressure will be muted due to the likelihood of replaying of partial withdrawals, as well as the length of time withdrawals will take."
The Shanghai update will take effect on April 12 at 22:30 UTC. according to blockchain infrastructure company Blocknative.
The Ether Stake unlock will be enabled by the Ethereum Improvement Proposal-4895.
Of the five EIPs to be activated in Shanghai, it is by far the most anticipated as it will bring Ethereum one step closer to a fully functional proof of stake system.
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