Staked ETH Withdrawals to Resume In March 2023, Major Price Correction Ahead?

A major event for the Ethereum ecosystem is awaiting this year ahead in March 2023. During the developers call last week on January 5, Ethereum developers reached a consensus that the Shanghai hardfork shall happen by March 2023.

One of the major developments that come along with the Shanghai hardfork is that that upgrade will allow validators to withdraw their staked ETH.

During the recent discussion, developers had joined to talk about incorporating a set of Ethereum Improvement Proposals (EIPs) dubbed EVM Object Format (EOF) in the Shanghai upgrade but decided against it in the latest call. Some developers who were working on EOF said that pushing it would push the hardfork at least by a month.

EOF would bring in a new contract format for the Ethereum Virtual Machine (EVM) supporting decentralized applications and smart contracts functionality. The implementation of EOF would revamp Ethereum’s transaction format thereby differentiating between smart contract code and data. Besides, it would also make the EVM further more upgradeable in the future.

Furthermore, Ethereum co-founder Vitalik Buterin shared his concern about the consequences of rushing the implementation of EOF. He said: “In the EVM, it’s much harder to remove things than it is to remove other features. If we’re going to make a new EVM version, that new EVM version should be designed with the idea of being very forward compatible to all kinds of upgrades that we want to do in the future.”

Back in December 2022, Ethereum developers agreed that enabling the withdrawals for staked ETH would be their highest priority in Q1 2023. This came after there was a growing uncertainty regarding the withdrawals of the staked ETH. But the latest announcement by the developers might bring some relief to the ETH stakers and node validators.

However, some market analysts have warned investors that resuming withdrawals will lead to a flood of ETH supply in the market and this could put major selling pressure on the price of ETH. Currently, 15.88 million ETH — worth around $20 billion have been staked on the Ethereum blockchain network.

The ETH price has already witnessed strong selling pressure in 2022 wherein it corrected by more than 60%. Currently, ETH is trading 4.3% up at a price of $1,318.

Concerns of global macro uncertainty still continue to hover over Ethereum and the broader crypto market.