Record $1.6B Staked Ethereum Redemptions Signal Industry Shift
Last week saw a record-breaking amount of staked Ethereum redeemed, with over 650,000 units valued at approximately $1.6 billion being withdrawn. This surge in redemptions marks the largest amount redeemed since the completion of the Shanghai Upgrade last year. Despite the substantial withdrawals, Ethereum’s price remained largely unaffected, experiencing a 12% increase during the same period.
Celsius and Figment Drive Surge in Ethereum Token Withdrawals
According to a Dune Analytics dashboard shared by analyst Tom Wan, the bankrupt crypto lender Celsius and staking service provider Figment were the primary contributors to the massive redemption surge. Together, these two firms orchestrated withdrawals totaling 563,300 staked ETH, accounting for an impressive 85% of the total redemptions during the reporting period. The involvement of Celsius and Figment in pushing Ethereum’s validator exits to a record high of over 16,000 validators on January 5th was also highlighted by CryptoSlate.
Ethereum Price Surges 12% Despite Massive Redemptions
Interestingly, the significant withdrawals of staked Ethereum did not have a negative impact on the price performance of the digital asset. Ethereum’s value actually rose by around 12%, reaching a peak of $2700, its highest value since May 2022. This upward price movement can be attributed in part to suggestions that the U.S. Securities and Exchange Commission (SEC) may approve a spot Ethereum exchange-traded fund (ETF), following the recent approvals granted to Bitcoin ETFs. This news has sparked optimism among investors and contributed to the positive price trend.
The Role of Celsius and Figment in Ethereum Validator Exits
Celsius, which previously announced its plans to unstake 206,300 ETH as part of its bankruptcy process, played a significant role in the surge of staked Ethereum withdrawals. The funds obtained from these withdrawals are intended to facilitate the distribution of assets to the lender’s creditors. On the other hand, Figment was also observed to be making substantial withdrawals on behalf of its clients, totaling over 350,000 staked ETH. These two firms were responsible for approximately 75% of the total withdraws in the queue, showcasing their influence in this industry shift.
Optimism for Ethereum ETF Approval Drives ETH Price Higher
The possibility of an Ethereum ETF approval by the SEC has further fueled the positive market sentiment surrounding Ethereum. Larry Fink, the CEO of asset management firm BlackRock, expressed his belief in the value of having an Ethereum ETF during an interview with CNBC. He stated that such an approval would be a significant stepping stone towards tokenization. This sentiment, coupled with data from Polymarket showing that 55% of bets anticipate an Ethereum ETF approval by the end of May, has contributed to the recent price surge of ETH.
Overall, the record $1.6 billion staked Ethereum redemptions, led by Celsius and Figment, signal a notable shift in the industry. Despite the significant withdrawals, Ethereum’s price has remained resilient, driven by optimism for an ETF approval and positive market sentiment. The roles of Celsius and Figment in this industry shift cannot be overlooked, as they have played a significant part in the surge of staked Ethereum withdrawals and validator exits. As the Ethereum ecosystem continues to evolve, these developments demonstrate the growing importance of staking services and the potential for further changes in the market.
Analyst comment
Positive news. The market is expected to continue experiencing growth as the record-breaking redemptions and involvement of Celsius and Figment signify a shift in the industry. Ethereum’s price is likely to remain resilient, driven by the positive market sentiment and optimism for an ETF approval. The roles of Celsius and Figment highlight the significance of staking services and suggest potential changes in the market.
