The majority are underwater.

Ethereum staking is a form of passive investing, where users lock their ETH tokens to validate transactions in return for an annualized staking yield of approximately 4%.

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Since Beacon Chain went live in December 2020, over 16.5 million Ether, worth $27.7 billion, have been staked.

According to Binance Research, 31% or 5.115 million ETH are in profit, while the remaining 11.385 million ETH are in loss.

In this context, loss indicates that the going market rate of ether is currently lower than when they were locked in the Beacon Chain.

Binance Research's analysis is relevant at a time when the market is trying to predict potential selling pressure after Ethereum's Shanghai upgrade, set to take place in mid-March, which is anticipated to open withdrawals of staked ETH.

Those who are underwater may have little incentive to liquidate their holdings after the upgrade, while those in profit are likely to hold onto their assets.

The report noted that around 2 million ETH were staked at prices ranging from $400 to 700, which represents the earliest stakers in December 2020.

This group is likely illiquid given that liquid staking was far less known at the time.

However, they are currently at profit, and are probably some of the strongest believers in Ethereum, according to Binance Research.

Notably, the whole staking balance cannot be withdrawn on the day of the upgrade, and only 43,200 ETH can be unstaked daily.

Nevertheless, the total staking reward earned, which is approximately 1 million ETH, can be withdrawn instantly, according to Saxo Bank.

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