Ethereum Shanghai Upgrade Leads to Huge Influx of ETH at Exchanges

Ethereum’s seamless implementation of withdrawals, also known as the Shanghai upgrade, on April 12 led ETH’s price to rally above $2,100, its highest level since May 2022.

AccessTimeIconApr 17, 2023 at 9:45 p.m. UTC
Updated Apr 18, 2023 at 5:50 p.m. UTC

Crypto exchanges received a net inflow of 179,500 ether (ETH), worth some $375 million in the four days after Ethereum’s Shanghai upgrade went live, according to crypto data firm CryptoQuant.

CryptoQuant data shows that traders deposited 1,101,079 ETH to exchanges between April 13 and April 16, while only removing 921,579 tokens. This was the largest four-day net inflow in a month.

Investors transferring tokens to exchanges usually indicates they are preparing to sell, which may lead to a price decline.

On April 12, Ethereum successfully implemented a long-awaited tech upgrade, also known as Shanghai. The upgrade has enabled withdrawals for the first time from Ethereum’s proof-of-stake blockchain, which has some 18 million ETH, worth $36 billion, locked in staking contracts.

Before the upgrade, some crypto watchers worried that the event would flood the market with millions of unlocked ETH and crash the second largest cryptocurrency’s price, although others predicted little impact or that the price would rise. News of a seamless implementation pushed ETH’s price above $2,100 the day following, its highest level since May 2022. ETH outperformed bitcoin (BTC) in that 24-hour period. ETH was recently trading at about $2,070, down more than 2% over the past 24 hours.

Data suggest that some traders have sold ETH during the price rally post-Shanghai.

Since the upgrade, the ETH-USD trading pair on crypto exchange Coinbase recorded $28 million more sell orders than buy orders, crypto market research platform Kaiko reported Monday.

ETH-USD buy and sell orders since Shanghai upgrade. (Kaiko)
ETH-USD buy and sell orders since Shanghai upgrade. (Kaiko)

Coinbase was one of the first exchanges that let users immediately unlock and withdraw their staked ETH via its platform. Binance, the world’s largest crypto exchange by volume, will follow suit on April 19, which “could result in more sell pressure for ETH,” Kaiko wrote.

ETH pared some of its earlier gains, and recently has been changing hands at $2,079, per CoinDesk data.

Edited by James Rubin.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.