Fewer than 1% of staked ETH projected to be sold following Shanghai upgrade, according to Glassnode.

According to Glassnode, approximately 170,000 Ether (ETH) from the total 18.1 million ETH staked on the Beacon Chain is expected to be unlocked within the initial week following the execution of the Shanghai hard fork on Ethereum.

This amount includes 100,000 Ether (valued at $190 million) in staking rewards and 70,000 ETH (worth $133 million) in staked Ether, as outlined in its report dated April 11.

Glassnode supported its forecast by noting that merely 253 depositors are poised to exit their stake, and several mechanisms are established to avert a sudden influx of Ether supply into the market.

The eagerly awaited Shanghai/Capella hard fork is scheduled for April 12, 2023, facilitating the withdrawal of staked #Ethereum.
In this extended edition of the Week On-Chain, we will assess the overall Ethereum staking environment, creating a framework to establish… pic.twitter.com/EVgsz3s6GG

— glassnode (@glassnode) April 11, 2023

The 253 depositors planning to exit control a total of 1,229 validators, while an additional 214 validators that have been slashed will be removed as soon as Shanghai is implemented on Ethereum. Glassnode is confident that the hard fork will not significantly affect Ether’s price movements:

“Even in the extreme scenario where the maximum quantity of rewards and stake are withdrawn and sold, the sell-side volume remains within the average weekly exchange inflow volume range.”

“Thus, we conclude that even in the most extreme scenario, the impact on ETH’s price will be manageable,” the firm stated.

Data from Glassnode indicated that only 22% of the 253 exiting depositors are currently realizing profits.

The types of organizations, size, age, and profitability of each of the 253 exiting Ethereum validators. Source: Glassnode

Glassnode anticipates a significant amount of Ether will be withdrawn from the cryptocurrency exchange Kraken following challenges to the legality of its staking services by the United States Securities and Exchange Commission (SEC).

It also expects that the crypto lending platform Celsius may withdraw a substantial amount to liquidate its staked Ether as part of its bankruptcy process.

However, it is unlikely that Kraken and Celsius will execute these withdrawals immediately upon the activation of Shanghai, according to the report.

Approximately 11.2% of the Ether staked on the Beacon Chain is managed by Kraken’s staking service. Source: Glassnode

The average deposit price for all staked ETH is $2,136, reflecting a 12.7% decrease from Ether’s current price of $1,865, resulting in a net unrealized loss of $4.7 billion, as reported by Glassnode:

“Following the peak unrealized loss of $16B in July 2022, the current net unrealized loss stands at $4.7B. This loss is primarily borne by Whale-sized depositors, who account for 76% of the unrealized losses.”

Global financial institution Fidelity Investments also believes that the Shanghai upgrade will not significantly influence Ether’s price movements.

Related: Ethereum price turns bullish ahead of next week’s Shanghai and Capella upgrades

In a report dated April 5, it stated that “selling pressure will be limited due to the likelihood of partial withdrawals being re-staked, as well as the duration required for the withdrawals to process.”

The Shanghai upgrade is scheduled to be implemented on April 12 at 10:30 pm UTC, according to blockchain infrastructure provider Blocknative.

The unlocking of staked Ether will be facilitated by Ethereum Improvement Proposal-4895.

Among the five EIPs that will be activated with Shanghai, this one is the most anticipated, as it will advance Ethereum closer to a fully operational proof-of-stake system.

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