Ethereum price gears up for rally ahead of ETH token unlock and “re-staking” narrative


  • Ethereum token unlock is near with the Shapella hard fork scheduled for April 12, re-staking platforms and banks are rolling out their announcements. 
  • Nearly 15% of Ethereum’s total supply is currently staked, making it one of the lowest staked assets among competitors. 
  • Ethereum “re-staking” could ease the pressure of a sell-off and keep the blue-chip digital asset’s circulating supply relatively low. 

Ethereum token unlock is drawing close with the upcoming Shanghai hard fork, also known as Shapella. Currently, nearly 15% of the asset’s supply is staked, lower than its Proof-of-Stake (PoS) competitor blockchains. Prior to token unlock, projects and institutions have announced “re-staking” solutions for Ethereum, and this is expected to ease the selling pressure from ETH withdrawals. 

Also read: Ethereum holders prepare for Shanghai hard fork, will Ethereum token unlock be delayed?

Ethereum “re-staking” can ease selling pressure on ETH

Ethereum token unlock is a key event for the altcoin’s community as stakers will have access to their staked ETH for the first time since December 2020. However, given that the altcoin’s price is over 60% away from its all-time high and nearly 15% of the supply is staked, less than most other PoS blockchains experts believe the community is looking for “re-staking” opportunities.

Several firms have lined up their services for “re-staking” the second-largest cryptocurrency by market capitalization. Experts on crypto Twitter believe Ethereum validators who staked ETH in the ETH2 deposit contract are maximalists, or believers in the altcoin's technology. This makes it less likely that validators sell their partially or completely withdrawn ETH tokens on exchanges. "Re-staking" and the Liquid Staking Derivatives narrative therefore poses a superior alternative to shedding ETH holdings across exchanges.

Will re-staking emerge as a driver that pushes ETH to $2,000?

Re-staking ensures that unstaked ETH does not flood crypto exchanges, in turn easing the selling pressure. At the same time, re-staking combined with ETH burn, contributes to Ethereum turning deflationary over time. Re-staking of the altcoin could therefore emerge as a bullish driver for Ethereum and act as a catalyst that pushes ETH closer to its bullish target of $2,000. 

ETH total value staked

ETH total value staked

Interestingly, closer to the date of ETH token unlock with the Shapella upgrade, there is a spike in Ethereum tokens staked on the deposit contract, based on data from crypto intelligence tracker CryptoQuant. This reveals an interest from the ETH holder community, in staking the asset and pulling the altcoin out of its circulating supply.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Polygon joins forces with WSPN to expand stablecoin adoption

Polygon joins forces with WSPN to expand stablecoin adoption

WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.

More Cryptocurrencies News
Coinbase envisages listing of more meme coins amid regulatory optimism

Coinbase envisages listing of more meme coins amid regulatory optimism

Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.

More Crypto News
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: Rally expected to continue as BTC nears $100K

Bitcoin: Rally expected to continue as BTC nears $100K

Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week. 

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP