The rally in ether prices is tapering off.

This morning, they jumped above the $2,100 mark but lost steam soon after. Ether is currently changing hands at $2,059, according to data from CoinGecko. It is still up by an impressive 3% from prices a day earlier and 10% from a week ago.

The propulsive momentum in prices is bookended by two redoubtable entities in crypto – Tether and Binance. The former accounts for more than 22% of all trades against ether and the latter is the venue of its highest trading activity.

Tether has been the subject of many a regulatory action while Binance, the world’s biggest cryptocurrency exchange by volume, was recently charged by the Commodities Futures Trading Commission (CFTC) for circumventing laws relating to Anti-Money Laundering (AML) and Know Your Customer (KYC).

Losses, Despite A Rally

Still, ether’s vertical price movement should have been good news for investors and traders withdrawing their staked tokens after the Shapella upgrade. But more than 70% of those who staked their ether tokens are underwater even now, after the rise in ether prices.

One of the reasons for this may be that they bought near the top. The numbers for staked ether have surged by 55% in the last year to 17.9 million, as of this writing. In the same period, ether prices have declined by 30%. Investors are further pinched by a decline in liquidity for crypto markets. Research firm Kaiko recently estimated that ethereum liquidity has declined by more than 40%.

A Concerted Effort

The situation for investors is made worse by Ethereum’s developers, who are determined to prevent precipitous price drops for the token. They have designed a long and staggered withdrawal process to ensure only a fraction of the 18.3 million staked earlier is taken out daily. Other platforms and exchanges are doing their bit to prop up the price of a worthless token.

Lido, the staking platform that holds of thirty percent of all staked ether, has promised not to commence withdrawals until a month after Ethereum itself enabled it for anyone who staked on its blockchain. [Lido’s governance token, which has surged in price, is also undergoing a last hurrah before the service’s eventual demise].

Crypto exchanges have also stepped in to help avert a slide in ether prices. After investors withdraw their tokens from staking, the best and most liquid venues for trading are exchanges. But Coinbase, one of the three top exchanges by trading volume, has delayed withdrawals of ether from their platform. Binance will enable withdrawals only after April 19. Even after that date, the exchange has promised delays of 15 days to several weeks for redemption.

A Staking Resurgence  

What is an investor to do in such circumstances?

Go back to the drawing board and stake the token, once again, in the hope that liquidity will revive, prices will rebound, and their profits will multiply. And so, the number of ethereum deposits has outpaced withdrawals, reversing yesterday’s fall in staked ether figures.

There are 17.9 million ethers staked on Ethereum’s platforms, a slight decrease from the 18.3 million available before withdrawals began. The number of validators in Ethereum’s network also remains flat at 561,655, a welcome development from yesterday’s marginal decline.

A Misplaced Wager

The mercenary vote of confidence in Ethereum’s staking program, and an increase in future prices, may be misplaced. Ether’s proponents say the ability to move in and out of an ether staking position will transform the token into a Wall Street asset.

But the delayed withdrawal process, in which staked ether is doled out in batches to prevent price slippage, adds liquidity risk to any trade involving ether. The case for ether as an appreciating asset also rests on a perceived utility for the token. There is none currently.

With Layer 2 platforms taking an increasingly important role to process transaction for Ethereum, there is no future source of demand for the token. In short, ether will remain a speculative asset, its price gyrating at the whims of traders and fraudulent crypto exchanges, even after the withdrawal process is complete.