Institutional investors’ interest in ETH seems to have increased as the leading altcoin Ethereum (ETH) left the Shanghai update behind in the past few weeks. Here are the details…
Leading altcoin Ethereum attracts the attention of institutions
Early signs indicate that Ethereum’s smooth Shanghai upgrade is boosting institutional investors’ interest in staking. Michiel Milanovic, an analyst at Ethereum Blockchain developer firm ConsenSys, said in a statement that the top enterprise-grade Ethereum (ETH) staking providers registered nearly three times as many entries in April compared to the entire last month. Milanovic added that 80 percent of the entries occurred after the Shanghai update went live on April 12.
As we reported on cryptokoin.com, Ethereum’s highly anticipated Shanghai update enabled the withdrawal of approximately 18 million tokens worth $35 billion, which were previously locked in staking contracts, as of April 12. Following the upgrade, ETH’s price surged to an 11-month high of $2,100, challenging concerns that the unlock could lead to significant selling pressure and a price drop. However, the token has recently dropped below $1,900, adjusting to a wider crypto market decline.
Allowing withdrawals had previously kept some investors away from ETH staking. The update also reduced the liquidity risk associated with locking in for staking ETH. “We expect this to naturally increase staking rates after ETH long-term validators withdraw their staked assets,” Milanovic said.
Investors plan to start staking
According to a survey conducted by Kiln, an enterprise-grade staking service, 68 percent of investors said they plan to start staking or increase the amount they stake after Shanghai. The survey was conducted in February, before the Shanghai update. Kiln co-founder and business manager Thomas de Phuoc said the firm is experiencing a new wave of interest in staking, even from traditional finance (TradFi) firms.
“Our sales team noted that they processed 60% more transactions compared to the same period last year, including traditional institutions.” said. “We are currently negotiating with some brokerages, investment banking services and holding companies in the US or Europe,” he says.
According to a Dune indicator chart by an analyst at crypto venture fund Dragonfly, Kiln has registered $47 million (24,640 ETH) in new deposits since the Shanghai upgrade. Competitor platform Staked.us has registered $111 million (58,592 ETH) inflows, more than double the $51 million (26,667 ETH) staking reward withdrawn, according to Dune data. Milanovic noted that it is still too early to draw firm conclusions because not all staking providers activate withdrawals immediately.
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