The Ethereum Merge has been one of the most anticipated upgrades in blockchain history, marking the network’s transition from proof-of-work to proof-of-stake. Amid the excitement, a growing concern has surfaced across social platforms—will the eventual unlock of staked ETH trigger a massive sell-off?
Data from Degen Score member korpi suggests that this fear is spreading on Twitter, with some in the community viewing the Merge as a potential downward catalyst for ETH’s price. However, korpi presents three compelling counterarguments to dispel this narrative. Given his bullish stance on Ethereum, his optimism about staking unlocks not leading to price depreciation comes as no surprise—but do his reasons hold weight?
Let’s explore the facts behind the fear and why many Ethereum supporters believe a market crash post-Merge is unlikely.
The Merge Does Not Unlock Staked ETH
One of the most widespread misconceptions is that the Ethereum Merge will immediately allow stakers to withdraw their ETH. This is false.
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The ability to withdraw staked ETH and accumulated staking rewards is not activated during the Merge. Instead, it’s scheduled for a future upgrade—expected 6 to 12 months after the Merge—commonly referred to as “Shanghai” or “Capella.”
This means that over 13 million ETH currently locked in staking contracts (representing more than 10% of the total supply) will remain inaccessible for at least several months post-Merge. Neither principal nor accrued rewards can enter the market during this period.
As a result, any speculation about immediate sell pressure from stakers cashing out at Merge completion is fundamentally flawed. The network design intentionally delays withdrawals to ensure a smooth transition and prevent destabilizing liquidity shocks.
Withdrawals Will Be Gradual, Not Sudden
Even when withdrawal functionality goes live, staked ETH won’t flood the market overnight. Ethereum’s protocol includes built-in rate-limiting mechanisms to ensure orderly and controlled exits.
To withdraw ETH, validators must first exit the active validator queue. However, the protocol limits how many validators can exit per epoch—an epoch being 6.4 minutes long. Depending on network conditions, only 4 to 6 validators can exit each epoch.
With approximately 395,000 active or queued validators currently staking ETH, and assuming no new validators join (an unrealistic but illustrative scenario), it would take over 424 days to fully process all withdrawal requests.
In practice, this means:
- Withdrawals will be staggered over many months
- Daily outflow caps prevent sudden surges in supply
- Market absorption capacity will likely exceed release rates
This gradual release mechanism mirrors previous Ethereum upgrades that prioritized network health over speed. It ensures that even if demand to exit staking rises, the market won’t face an avalanche of sell orders all at once.
Stakers Are Long-Term Believers, Not Short-Term Traders
Who chooses to lock up their ETH for an uncertain period with no guaranteed exit date? The answer: true believers.
Most individuals who stake directly on Ethereum are long-term holders (HODLers) deeply committed to the ecosystem’s success. They understand the risks and technical requirements involved in running a validator node—something far beyond casual participation.
Data from analytics platforms like Nansen and Etherscan shows that:
- Only about 35% of staked ETH comes from liquid staking solutions like Lido Finance
- Roughly 30% is held in non-exchange, non-pool addresses—likely individual node operators
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Liquid staking derivatives such as stETH allow users to maintain liquidity while earning staking rewards, making them attractive to traders and short-term investors. These users can already sell their staked positions on secondary markets without waiting for official withdrawals.
In contrast, solo stakers—who run their own nodes—typically do so out of ideological alignment with Ethereum’s vision. They often view staking not just as an investment, but as a form of active participation in network security and decentralization. Selling their ETH contradicts their core motivation.
Therefore, even when withdrawals become possible, many of these holders are unlikely to sell—especially not at current market prices.
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Frequently Asked Questions (FAQ)
Q: Does the Ethereum Merge allow immediate withdrawal of staked ETH?
A: No. The Merge only transitions Ethereum to proof-of-stake. Withdrawals are enabled in a later upgrade, expected 6–12 months afterward.
Q: How long will it take for all staked ETH to be withdrawable?
A: Due to protocol limits on validator exits per epoch, full withdrawal processing could take over a year—even after withdrawal functionality launches.
Q: Can stakers sell their ETH before official withdrawals are enabled?
A: Yes, indirectly. Users who use liquid staking services like Lido can trade tokenized versions (e.g., stETH) on exchanges without needing direct withdrawals.
Q: What percentage of staked ETH is controlled by individual node operators?
A: Around 30% of staked ETH resides in addresses not linked to exchanges or major pools, suggesting ownership by independent validators—often long-term believers.
Q: Will the unlock of staked ETH crash Ethereum’s price?
A: Most analysts believe large-scale dumping is unlikely due to delayed withdrawals, slow release mechanics, and the long-term orientation of most stakers.
Q: Is now a good time to stake ETH ahead of the Merge?
A: Staking offers yield and supports network security, but capital will be locked for months post-Merge. Only stake if you’re comfortable with illiquidity and believe in Ethereum’s long-term value.
Final Outlook: No Imminent Sell-Off Expected
The idea that the Ethereum Merge will unleash a wave of selling pressure is based on misunderstanding two key facts: timing and holder behavior.
First, there is no immediate unlock—the market won’t see any new supply from staking for at least half a year after the Merge. Second, when withdrawals do begin, they will be slowly metered, preventing sudden liquidity shocks.
Finally, and perhaps most importantly, the people who staked their ETH under uncertain conditions are not typical traders. They are builders, believers, and long-term investors who chose commitment over convenience.
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While short-term volatility is always possible in crypto markets, the structural and behavioral factors suggest that fears of a post-Merge ETH dump are overblown. Instead of panic, what we’re likely to see is continued accumulation, strengthened network security, and growing confidence in Ethereum’s upgraded foundation.
For investors and participants alike, this isn’t a moment of risk—it’s a milestone worth celebrating.