The price of Ethereum has experienced a decline due to the increase in staking withdrawals. As more investors withdraw their ETH tokens from staking, the demand for the cryptocurrency decreases, leading to a fall in its market value. This trend has affected the entire cryptocurrency market, as many altcoins are also experiencing a decline in price. The impact of staking withdrawals on Ethereum’s price reflects the significant role that staking plays in the cryptocurrency ecosystem. Ethereum 2.0’s introduction earlier this year has led to the rise of staking, as investors can earn rewards by locking up their ETH tokens on the network. However, as more people withdraw their staked tokens, the market’s supply increases, leading to a fall in price. Nonetheless, experts predict that Ethereum’s price will recover in the long term, as the cryptocurrency is a fundamental part of the decentralized finance (DeFi) ecosystem.
Kraken Crypto Exchange Processes Large Amount of Ethereum Withdrawals
Kraken, the popular crypto exchange, processed a large chunk of the pending Ethereum withdrawals queue in the past few days. According to Nansen researchers, Kraken had over 330,000 full withdrawals of ETH with an approximate value of $975 million. This represents a huge chunk of the total Ethereum withdrawals observed recently. However, withdrawals have now dropped back to low levels, with deposits outpacing them.
Ethereum Withdrawals Stabilize Despite Fluctuations
The total amount of ETH still staked is reported to be around 18.6 million, valued at approximately $36.4 billion. However, this figure varies depending on the analytics platform you look at. While Token Unlocks dashboard is reporting 17.3 million ETH staked at the time of writing, the net staking balance has declined by 615,790 ETH. The withdrawal queue currently has 853,138 ETH valued at $1.66 billion.
Some of the withdrawn ETHs have been sold as the price of ETH has retreated by more than 8% in the past day or so to hit an intraday low of $1,928 during the Friday morning Asian trading session. ETH was trading at $1,933 at the time of writing and appears to be moving in the shadow of Bitcoin, which has pulled back 7% over the past couple of days.
Impact of U.S. SEC Action Against Kraken
In February, the U.S. Securities and Exchange Commission took action against Kraken for offering unregistered securities, which forced the exchange to shutter its staking services. However, the company still remains in operation and currently processes a significant portion of the Ethereum withdrawals queue.
Liquid staking platforms like Lido have seen an increase in the total value locked in ETH since the Shapella upgrade, but it has yet to enable withdrawals for its users. This could be due to the fact that some of the withdrawn ETH are being redeposited in these platforms.
Conclusion
Kraken has been processing a significant portion of Ethereum withdrawals recently, and the pending withdrawal queue has dropped back to low levels. While ETH prices have retreated recently, the total amount of ETH still staked remains significant. The impact of the U.S. SEC action against Kraken has not significantly affected its operation, and many of the withdrawn ETH are being redeposited in liquid staking platforms.