Ether Open Interest Up 39% After Shapella Upgrade
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Ether Open Interest Up 39% After Shapella Upgrade

The number of active ether futures contracts trading on the Chicago Mercantile Exchange (CME) has increased by 39% since April 10.
Neither the author, Ruholamin Haqshanas, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Ethereum’s open interest, the value of all open ETH derivatives positions, has increased by around 40% since last week. This comes as Ethereum’s much-anticipated Shapella upgrade was executed successfully on Friday, marking the most significant change to the Ethereum blockchain since the Merge in September last year. 

Ethereum Open Interest Up 39% Since April 10th

The Ethereum open interest, the number of active ether futures contracts trading on the Chicago Mercantile Exchange (CME), has increased by 39% to 6,248 since April 10, data by CME Group shows. The open interest has further surged by 70% to $633 million in US dollars. 

Furthermore, the aggregated open interest of Ethereum futures hit a one-year high on Friday, as per data by CoinGlass. The figure surged above $8 billion on April 14, compared to less than $6 billion a few days earlier. The all-time high ETH open interest was recorded in November 2021 at $11.2 billion.

Open interest refers to the value of all outstanding contracts that have not been settled yet. In other words, open interest indicates the number of contracts traders and investors hold in active positions ready to be traded. 

Open interest is used as an indicator to determine market sentiment and the strength behind price trends. Specifically, the metric is considered a proxy for institutional activity, suggesting that investor interest in Ethereum has risen following its recent upgrade.

On April 12, Ethereum completed its long-awaited “Shapella” upgrade. The hard fork combined two simultaneously executed upgrades — Shanghai on the consensus layer and Capella on the execution layer. For the first time, Shapella enabled validators to withdraw their staked Ethereum.

As reported, Ethereum liquid staking is expected to become more popular, particularly among institutional investors, following the Shapella upgrade. That is because with Shapella ultimately unlocking staked ETH, redeeming wrapped ETH for the underlying staked ETH will likely push liquid staking platforms to bring in more incentives as competition heats up.

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Ethereum Price Holds Strong Despite Withdrawals

In the months and weeks leading up to the upgrade, many feared that Shapella would cause significant selling pressure as more than one million ETH staking rewards would become instantly available.

Days before it went live, however, Glassnode predicted there wouldn’t be a mass selloff. The blockchain research company noted that only 253 depositors are waiting to exit their stake and that the Ethereum blockchain has adopted a few mechanisms to prevent a flood of Ether supply from hitting the market simultaneously.

Furthermore, the company claimed that market participants would likely absorb the selling pressure, which could further offset any price drops. Glassnode concluded that the hard fork would not have a “dramatic” impact on the price of ETH. 

As expected, there was no notable drop in the price of ETH following the update. After the update went live, the second-largest cryptocurrency surged past the $2,000 level. 

According to data fetched by Nansen, stakers have withdrawn 574,700 ETH — worth about $1.21 billion — since the Shapella upgrade. Another 992,667 ETH is waiting to exit, with 29,203 validators scheduled for a full exit. 

However, the Nansen dashboard also shows that there has been a surge in ETH withdrawal, which could partially offset the impact of exiting ETH. Over the past 24 hours, 92,891 ETH has been deposited, compared to 12,849 ETH withdrawn, as per data by Nansen. 

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