A recent report from data analytics firm Nansen has shed light on the profitability of ETH deposits ahead of Ethereum’s Shanghai upgrade. The findings reveal that only 35% of deposited ETH is profitable, with illiquid stakers faring better than their liquid counterparts. Specifically, 56% of illiquid stakers are in profit, while only 22% of liquid stakeholders can say the same. These results suggest that most stakers have deposited ETH at rates higher than the current market price, which is unlikely to create significant selling pressure. These insights provide valuable information for investors and stakeholders looking to make informed decisions about their ETH holdings.
The upcoming ETH Shanghai upgrade is a meticulously planned hard fork that will enable ETH investors to finally unstake their holdings. However, some concerns are that releasing staked ETH may lead to an influx of tokens flooding the market, potentially causing significant selling pressure. It is crucial to monitor the situation closely and take necessary measures to mitigate any adverse effects on the market.
As per Nansen’s analysis, the first wave of withdrawals post-Shanghai is expected to span 3-4 days for partial withdrawals and 3-8 weeks for complete withdrawals. This projection assumes that 10% of the total ETH investment will be withdrawn within the first 24 hours of the launch.
In the present scenario, unstaking and selling ETH could exert a selling pressure ranging from $1.9B to $4.6B. As per Nansen’s analysis, the current low liquidity of ETH spot markets could adversely impact pricing. However, the study also highlights that other factors, such as a surge in demand for ETH due to reduced supply and increased fees burnt, could offset this effect. It is imperative to consider these variables while assessing the potential outcomes of such actions.
Despite the initial selling pressure, the firm’s long-term projection for Ethereum (ETH) in Shanghai is optimistic. The report highlights several factors that will ultimately outweigh any negative impact, such as improved scalability, security, and sustainability of the Ethereum network. Additionally, the growing popularity and innovation of decentralized finance (DeFi) and non-fungible tokens (NFTs) will contribute to ETH’s success. Furthermore, the decentralization of Ethereum will reduce the risk of censorship, further bolstering its potential. The firm maintains a professional and positive outlook for ETH Shanghai.
CryptoQuant, a leading crypto analytics platform, has echoed the sentiment that selling pressure can be a significant factor when investors have the potential for extraordinary returns. It is common for some investors to cash out their winnings when significant assets are unstaked simultaneously, leading to selling pressure. However, given the limited profit possibilities for Ethereum investors, the likelihood of intense selling pressure is low. These insights highlight the importance of monitoring market trends and investor behavior to make informed investment decisions.
