Ethereum investors react to Shanghai upgrade contrary to expectations, enabling staking withdrawals

• Ethereum staking has seen a 280% increase in monthly average since the Shapella upgrade.
• With the option to withdraw their investment, investors seem to be more secure in staking their ETH, as noted by the rising number of new depositors.
• The minimal withdrawal has also kept Ethereum price from falling sharply, resulting in ETH following the broader market cues.

Ethereum price was expected to decline after the Shanghai upgrade was scheduled to go live as many believed investors would jump to unstake and sell their ETH for profits. Interestingly that did not occur, and instead, investors took a different approach – staking more, not less ETH.

Ethereum investors turn more bullish after Shapella 

Ethereum network experienced significant withdrawals of staked ETH before the Shapella upgrade first went live. But the tables turned pretty quickly post the Merge in September 2022, when the average ETH staked every month increased from 560,000 to 630,000 ETH. 

The average of monthly ETH staked then increased by about 280% in April after the Shanghai hard fork took place. The trend continued, and at the moment, on average, investors seem to be staking nearly 2.4 million ETH, with the month of May registering the highest inflows.

Ethereum staking over the past major events

The reason for this increase is touted as being to do with investors having the option presented by the Shapella upgrade to withdraw their stake at any time. This makes investors feel more secure about staking their ETH, as unstaking and selling would not be an issue in times of market crash.

This confidence has been driving more and more ETH holders to stake their assets resulting in the new depositors' average increasing from 55 to 326 in the span of two months. However, new depositors have pulled back over the last week as the Ethereum price rally took a break after failing to close above the $1,900 mark.

Ethereum staking new depositors

Ethereum price also benefited from the increased investor confidence post-Shanghai hard fork as their reluctance to sell kept the altcoin from slipping on the charts. This also helped ETH from observing a consequential decline during the recent crash in early June when the second-generation cryptocurrency fell by more than 13.5%.

ETH/USD 1-day chart

Thus going forward, this increase in staking could help the price tread upwards and eventually tag the multi-week barrier at $2,000.

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