Ethereum Shanghai Upgrade: Kraken and Coinbase Withdraw Over 870,000 ETHs

04/25/2023 03:48 • NFT Newsflash • 180 views

On April 25th, according to Nansen data, Kraken and Coinbase were the top two institutions to withdraw principal after the upgrade of Ethereum Shanghai. The two institutions withdrew a total of 870688 ETHs, accounting for 78.3% of the total principal withdrawal amount.

Data: Kraken and Coinbase account for 78.3% of the total principal withdrawal after Ethereum upgrade

Introduction

On April 25th, 2021, the Ethereum network underwent a significant upgrade known as the “Shanghai” upgrade. One of the effects of this upgrade was significant withdrawals of principal by users on major cryptocurrency exchanges, including Kraken and Coinbase. According to Nansen data, Kraken and Coinbase were the top two institutions to withdraw principal after the Ethereum Shanghai upgrade, with a total of 870,688 ETHs withdrawn, accounting for 78.3% of the total principal withdrawal amount. In this article, we will explore the reasons behind this massive withdrawal and the implications it may have on the Ethereum ecosystem.

What is the Ethereum Shanghai Upgrade?

Before discussing the reasons for the withdrawals, it is crucial to understand what the Ethereum Shanghai upgrade is. The upgrade, which was implemented on block 12,244,000, introduced several changes to the Ethereum network, including an increase in block gas limit from 12.5 million to 15 million, a reduction in gas costs for various operations, and other significant improvements that aimed to make the network more scalable and efficient.

Why Did Kraken and Coinbase Withdraw Over 870,000 ETHs?

One of the main reasons behind the massive withdrawals by Kraken and Coinbase after the Ethereum Shanghai upgrade was most likely due to profit-taking. Both exchanges likely saw significant gains in ETH value following the upgrade, and many users withdrew their principal to realize their profits, leading to the large withdrawals reported by Nansen data.
Another possible reason for the withdrawals is the fear of a potential market crash or a significant drop in ETH value after the upgrade. Cryptocurrency markets are known for their volatility, and any significant change in the network can have a significant impact on prices. As a result, many traders and investors may have chosen to withdraw their principal to avoid potential losses.

Implications of Kraken and Coinbase’s Massive Withdrawals

The massive withdrawals of principal by Kraken and Coinbase following the Ethereum Shanghai upgrade have several implications for the Ethereum ecosystem. Firstly, the withdrawals may have contributed to increased volatility and instability in the market, as many traders and investors may have been uncertain about the network’s future following the upgrade.
Secondly, the withdrawals may have caused a temporary shortage of liquidity on the exchanges, leading to higher trading fees and reduced trading volume. Finally, the withdrawals may have had a negative impact on the adoption and use of Ethereum by institutions and other large investors, who may view the Ethereum network as unstable or unreliable.

Conclusion

In conclusion, the Ethereum Shanghai upgrade was a significant event that had several effects on the cryptocurrency markets, including the massive withdrawals of principal by Kraken and Coinbase. While the precise reasons for these withdrawals remain unclear, they are likely due to profit-taking and fear of market instability. The implications of these withdrawals are yet to be fully understood, but they may have contributed to increased volatility and reduced adoption of Ethereum among institutions and other large investors.

FAQs

1. Why did Kraken and Coinbase withdraw so much Ethereum after the Shanghai upgrade?
– The withdrawals were likely due to profit-taking and fear of market instability.
2. What were the effects of the withdrawals on the Ethereum ecosystem?
– The withdrawals may have contributed to increased volatility, reduced liquidity on the exchanges, and a negative impact on Ethereum adoption among institutions.
3. Will the Ethereum Shanghai upgrade have long-term positive effects on the network?
– The upgrade is expected to make the Ethereum network more scalable and efficient, which could lead to increased adoption and use in the long term.

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