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Another chunk of ETH has been withdrawn due to Kraken, but deposits going onto the network have almost matched them.
Ethereum staking withdrawals have entered their third “round,” but Ether (ETH) staking deposits have almost equaled them, according to the data from the analytics platform Nansen.
Ethereum staking withdrawals started ramping up for the third time on April 24 and into April 25. According to Nansen, the crypto exchange Kraken was responsible for a large portion of these withdrawals.
A “round” refers to the number of days taken to process partial withdrawals and rewards. Nansen says it currently takes just under four and a half days.
The last large batch of withdrawals on April 24 was a total of 61,608 ETH in principal and reward withdrawals. However, at the same time, there were 63,009 ETH deposits, reported Nansen.
This has resulted in zero change in the balance of staked ETH over the past 24 hours.
In February, Kraken was forced to halt its Ethereum staking services following enforcement action and a fine by the United States Securities and Exchange Commission, which accused it of selling unregistered securities.
As a result, much of the ETH withdrawn early on has been from Kraken wallets as assets get returned to stakers. According to Nansen, 2.3% of the total withdrawable ETH remains from Kraken.
Nansen currently reports there is a total of 632,651 ETH waiting in the pending withdrawal queue. At current prices, this is valued at around $1.16 billion.
Third round of principal withdrawals underway
— Martin Lee | Nansen (@themlpx) April 24, 2023
Again largely Kraken, bringing their total principal withdrawn to almost 400k
Source: @nansen_ai pic.twitter.com/jVnnxnl5Jf
Before the last wave of withdrawals commenced, Nansen reported an all-time high in the total amount of staked ETH. The figure hit 18,796,663 ETH valued at around $34.5 billion on April 24.
Related: ETH staking passes withdrawals for the first time since Shapella upgrade
The current figure, which is slightly lower than this peak, represents 14.5% of the total Ether supply. Due to the EIP-1559 burning mechanism, the total supply has declined by 114,077 ETH (around $209 million) since the Merge in September.
Concerns over a massive exodus of staked Ethereum following the Shapella upgrade have been quashed. Token Unlocks is reporting that a total of 1.66 million ETH has been withdrawn since April 12, but 1.07 million ETH has been deposited, signaling there is still quite an appetite for staking Ether.
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It has been a week since Ethereum’s Shapella hard fork, and statistics indicate that ethereum deposits on April 18 have exceeded withdrawals for the first time since the upgrade. At present, 929,999 ether worth $1.94 billion is pending withdrawal, and over the past three days, 112,568 ether has been added to liquid staking protocols. Just […]
Since the Shapella hard fork on April 12, Ether has seen a price gain of nearly 10%.
Over 1 million Ether (ETH) worth $2.1 billion has now been withdrawn from Ethereum’s Beacon Chain within the first four days of the Shapella hard fork and Ether has pushed over $2,100 for the first time in 11 months.
The 1.03 million ETH withdrawals have come from 473,7000 withdrawal requests, with Saturday, April 15 being the largest withdrawal day at 392,800 ETH according to data from beaconcha.in.
Of the active validators, nearly 87% or 469,000 of the 540,000 are now able to withdraw their staked Ether.
While members of the Ethereum community were split on what impact Shapella would have on the price of Ether, the first four days have produced close to a 10% rise.
The figures are of little “surprise” to Lachlan Feeney, chief executive of blockchain consulting and development firm Labrys, who explained to Cointelegraph that many validators are re-staking Ether back onto the Beacon Chain:
“Much of the stake that has been withdrawn over the last few days is actually going straight back into The Beacon Chain as validators are looking to compound their interest. So much so that net stake is currently increasing.”
Given the current macroeconomic climate, Feeney explained that many early stakers wanted to liquidate after what has been nearly a 30-month wait for some.
Over the mid to long-term, Feeney believes the Shapella hard fork will only increase the amount of Ether staked, which of course will only strengthen Ethereum at the consensus level:
“Because Shapella is a massive de-risking event, over the medium to long-term more, not less, ETH will be staked. We anticipate that in the not too distant future, we will reach a record high of Ether being staked.”
Markus Thielen, the head of research at digital asset platform Matrixport explained to Cointelegraph that the closure of crypto exchange Kraken’s staking services may have contributed to the higher figures:
“It appears largely due to the Kraken's staking business being unwound. This will only have a temporary effect as we are also seeing a significant demand from investors who now are able to stake with more visibility on the liquidity of staked positions.”
Thielen said he expects a large amount of un-staked Ether from Kraken to be “recycled” back into the Beacon Chain through other entities.
While Thielen anticipates the positive price action to cool off this week amid increased selling pressure, he thinks Shapella will ultimately attract more institutional investors to stake on Ethereum.
Related: 4 strategies for staking Ethereum
The 1 million milestone is a 500% increase from an April 11 prediction by blockchain intelligence firm Glassnode, which estimated only 170,000 Ether to be un-staked after the first week of Shapella.
On-chain analytics firm Nansen slightly overshot the mark, predicting 1.4 million Ether would be withdrawn after the first few days of Shapella.
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Circle and BlockFi executives were questioned after the lawmakers accused SVB of “coddling” and giving “white glove” treatment to its largest depositors.
Executives at the stablecoin issuer Circle and the bankrupt cryptocurrency lender BlockFi have been questioned by two members of Congress investigating the so-called “mutual backscratching arrangements” alleged to have taken place with the now-failed Silicon Valley Bank (SVB).
On April 9, letters from Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez (AOC) were sent to Circle, BlockFi and 12 other non-crypto tech firms asking a series of questions on each firm's relationship with SVB.
The lawmakers stated that more needs to be known about SVB’s reported “coddling” and “white glove” treatment towards its largest depositors in order to understand if these firms played a role in SVB’s collapse.
Jeremy Allaire and Zac Prince, the respective chief executives of Circle and BlockFi, were questioned on the length of their financial relationships with SVB, amounts deposited with the bank along with what “agreements” were made between their firms.
In addition, the pair wanted to know if SVB offered “perks” such as low-interest rate mortgages or SVB-sponsored “ski trips, conferences and fancy dinners.”
“Congress, bank regulators, and the public are owed an explanation for the bank’s hyper-reliance on tech industry firms and investors," Warren and AOC wrote.
Related: Polls suggest Elizabeth Warren’s anti-crypto army strategy won’t pay off
They added the extent of SVB's depositors in the tech industry resulted "in an abnormally high percentage of deposits" not insured by the Federal Deposit Insurance Corporation (FDIC) and questioned the executives on "the role that companies like yours might have played in precipitating the $42 billion single-day-run on SVB.”
“Obtaining information on these factors is important for understanding how SVB failed and how to prevent the next failure,” they added.
Warren and AOC said they believe it may explain why some customers, such as Circle, placed extremely large amounts of uninsured deposits at SVB.
Shortly after SVB collapsed, Circle disclosed that they had $3.3 billion tied up at SVB. While BlockFi was found to have $227 million in uninsured deposits with the bank.
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After the U.S. Commodity Futures Trading Commission sued Binance for alleged violations of trading and derivatives rules, a significant amount of cryptocurrency was withdrawn from the exchange. Data from analytics provider Nansen shows $400 million in Ethereum-based funds were withdrawn in 24 hours, and 3,655 bitcoin worth more than $99 million were withdrawn over the […]
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