ETH Staking Drops Due to Regulatory Pressure Ahead of Shapella Upgrade

Glassnode, a platform that analyzes cryptocurrency data, says that even though people were excited about the upcoming Ethereum Shapella upgrade, the amount of Ethereum being used for staking has decreased by 13.6% in just a week. This is because there has been more pressure from regulators, which has made some people hesitant to invest in Ethereum.

The amount of ETH being staked monthly has recently dipped according to the on-chain analytics platform Glassnode. pic.twitter.com/wWHBH94oKk

— MacArt(💙,🧡) (@MacarthArt) April 10, 2023

This is cause for worry since it may damage the faith of investors who have invested in Ethereum, as well as the overall performance of the cryptocurrency market.

Regulatory Pressure & Lido Popularity Decreased ETH Staking Deposits

Glassnode announced on April 9, 2023, that there is now limited activity in the Ethereum staking environment thanks to governmental pressure and the upcoming Shanghai upgrade. US financial regulators have started pushing down on cryptocurrency ventures, with the SEC specifically targeting staking services provided by some cryptocurrency providers.

The week preceding the Shanghai upgrade, an additional 2381 validators joined the exit queue, bringing the total to 3579.

This is equivalent to 114,528 ETH withdrawn (0.6% of total stake). However, only 57,600 ETH will be released per day as the queue regulates exit amounts. pic.twitter.com/Kr2gjwgG9a

— glassnode (@glassnode) April 12, 2023

Glassnode identified two factors causing the drop in Ethereum staking deposits: the popularity of the liquidity-staking platform Lido, which has taken market share from exchanges like Binance, Kraken, and Coinbase, and regulatory pressure on those exchanges. Lido now accounts for a third of the total amount of staked Ether.

Ethereum Staking Revenue and Ether Price Drop

As we previously stated that the revenue earned from staking Ethereum has fallen, and so has the price of Ether. Staking Rewards data shows that Ethereum validator revenue dropped from $2.43 billion on April 5 to $2.1 billion at present, with a steady decline over the past week.

Data shows that the Ethereum (ETH) staking revenue has dropped by 13.6% in just a week. The fall comes hours ahead of the highly anticipated Shanghai upgrade, scheduled for April 12 at around 22:27 UTC. #Bitcoin #CryptoNews #openai Sentiment Result : Negative pic.twitter.com/13wwiK43Qd

— Crypto Talkies – Sentiment Analysis Tool (@crypto_talkies) April 12, 2023

This means that people who own Ether may have lost some money, and it may also affect the confidence of investors in the overall cryptocurrency market. However, it’s important to remember that prices can go up and down, so it’s a good idea to be cautious and do your research before investing in any cryptocurrency.

In the past few hours, the price of Ether has gone down by 2.74%. Although, the declines were short-lived as ETH managed to rise above the $1,900 mark once again after the much-awaited Ethereum Shanghai Upgrade.