More than $325 million worth of Ethereum (ETH) could hit the open market in the wake of the project’s recent Shapella upgrade, according to the crypto analytics firm Glassnode.
In a new blog post, Glassnode analyst Alice Kohn examines different staking cohorts in an attempt to estimate the amount of ETH that will be sold following Shapella.
“Our best estimate [is] based on a 50% withdrawal credential update, our segmentation of depositors, and assumptions regarding investor conviction, and profitability. Also believing that the current number of exiting validators will double around the Shanghai upgrade, we estimate a total of 170,000 ETH to be sold.”
With Ethereum trading at $1,916 at time of writing, that trove of ETH would be worth more than $325 million.
The so-called Shapella upgrade is a portmanteau of the two recent Ethereum upgrades: Shanghai, which made changes to the project’s execution layer, and Capella, which made changes to the consensus layer.
The upgrades went into effect on Wednesday, giving validators the opportunity to withdraw ETH from Ethereum’s proof-of-stake blockchain for the first time following the transition from the proof-of-work consensus mechanism.
Kohn acknowledges that there could be a more extreme outcome following Shapella. If the total accumulated rewards and the max amount of stake per week are withdrawn and sold, she says that 1.54 million ETH worth nearly $2.95 billion could hit the open market.
Even in that scenario, however, Kohn says there isn’t a reason to panic.
“Even in the extreme case where the maximum amount of rewards and stake are withdrawn and sold, the sell-side volume still falls within the range of the average weekly exchange inflow volume. Therefore, we conclude that even the most extreme case will have an acceptable impact on the price of ETH.”
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