Ethereum Validators Rush to Withdraw ETH After Celsius Halts Staking

Over 15,000 validators are currently queued up to withdraw approximately 500,000 ETH, valued at about $1 billion, following the announcement of lending company Celsius ceasing ETH staking.

Ethereum Validators Rush to Withdraw ETH After Celsius Halts Staking

According to data from ValidatorQueue, the Ethereum blockchain has witnessed a record increase in the past three months in the number of validators in the exit queue, exceeding 15,000. This figure implies that there are currently about 500,000 ETH, worth over $1 billion, awaiting validation for withdrawal to wallets (1 validator equals 32 ETH).

It is estimated that the time to complete processing the entire queue list will be 5 days, with an additional total duration of over 14 days to unlock assets for withdrawal.

The number of validators in the queue to confirm ETH withdrawals reached an all-time high (ATH) in the past three months (October 2023 - December 2023).

However, according to Nansen, there are actually 637,564 ETH (out of a total of 29,177,292 ETH including rewards), with 19,906 validators (out of a total of 909,819 validators) currently confirming withdrawals, recording numbers close to the peak period following the completion of the Shanghai upgrade in April 2023.

Statistics on the number of validators awaiting ETH staking withdrawals as of 11:45 PM on 06/01/2024. Source: Nansen

The rush to withdraw ETH occurred immediately after lending company Celsius declared it would begin discontinuing Ethereum staking in the near future to ensure liquidity for reallocating assets to creditors and covering operational costs during the corporate restructuring process. This inadvertently stirred up the cryptocurrency community, continuously sharing details of the staking wallet containing over $453 million worth of ETH from the company.

Moreover, an analyst from 21Shares suggests that these figures do not encompass all ETH owned by Celsius, as there is an additional $775 million worth of ETH labeled by Nansen under Figment - a company specializing in staking for large organizations - likely also owned by the bankrupt lending firm.

21Shares analyst cites past transactions where Celsius repurchased 428,000 stETH (equivalent to $781 million) from Lido at the end of May 2023, reallocating them into new staking contracts, including 197,000 ETH to Figment's staking address.

This news has partly negatively impacted the Ethereum community's sentiment as concerns mount over their investment portfolios. ETH prices also immediately saw a slight correction of about 2%, dropping to $2,210 from an initial trading mark of $2,250.

Chart for the 15-minute ETH/USDT pair on Binance as of 11:50 PM on 05/01/2024