Over 30% of Ethereum's Total Supply (36.3M ETH) Now Staked

Despite market fluctuations, the volume of staked Ethereum is increasing, signaling a reinvigorated investor confidence that transcends short-term volatility.

Key Takeaways

Over 30% of Ethereum's total supply, equivalent to 36.3 million ETH, has been staked, affecting circulation.
Staking has continued to grow despite market turbulence, reflecting long-term investor confidence.
The annual percentage yield (APY) for staked ETH has decreased as more Ether enters staking.
Ethereum network experiences a surge in transaction volume, reaching an all-time high, alongside reduced fees.

Ethereum

Over 30% of Ethereum's total supply is now staked, significantly reducing the amount available for circulation. This kind of reduction may lead to a supply shock, where the growing demand for Ethereum could outpace its availability.

Surge in Staked Ethereum Supply

According to data from CryptoQuant, a total of 36.3 million ETH has been staked, which represents slightly over 30% of Ethereum’s circulating supply of 120.69 million. This figure has shown consistent growth, even amid market challenges, as users adopt a long-term perspective despite current market uncertainties.

Staking activities have seen significant increases this year. On January 1, 2023, the total staked amount was 35.99 million ETH, valued at around $108 million. As of now, that has grown to 36.31 million ETH, worth approximately $117 million—an increase of 0.89%.

Ethereum Staked Supply/CryptoQuant

The year-over-year growth is also notable. About a year ago, the amount of staked Ethereum was approximately 34.19 million, resulting in a 6.2% increase over the past year.

Importance of Staking for Ethereum

The implications of this trend for the Ethereum network are significant. Firstly, a reduced supply in the market removes immediate selling pressure, which could be favorable for price stability.

Moreover, heightened staking activities enhance the network's security, raising the costs for anyone attempting to attack the Ethereum ecosystem. This also reflects long-term trust among holders; staking signifies belief in future price increases for the asset.

Nevertheless, as more Ethereum is staked, the annual percentage yield (APY) naturally decreases to maintain ecosystem balance.

The Ethereum Validator Queue indicates that over 2.6 million ETH are awaiting entry into staking, leading to a waiting period of about 45 days and 12 hours. Conversely, only 64 ETH are currently in the exit queue, suggesting validators are reluctant to withdraw their staked assets.

Ethereum Validator Queue

Record Transaction Volume on the Ethereum Network

The rise in staking coincides with other positive developments for Ethereum. On January 16, daily transactions soared to 2.88 million, marking a record-high for the network. This surge indicates increased on-chain activities and renewed user engagement within Ethereum.

Interestingly, this spike in transactions occurred alongside a significant drop in Ethereum mainnet fees, which fell to an average of 0.054 gwei (about $0.01), making transactions more affordable compared to previous averages. This trend reflects a shift from earlier cycles, aided by recent upgrades to the network.

As of this writing, Ethereum's price remains under pressure due to unfavorable macroeconomic conditions, failing to respond positively to the increased network activity. The market's volatility and uncertainty introduce further unpredictability in potential price movements.

Disclaimer: This article is for informational purposes only and should not be interpreted as financial advice. The perspectives shared are those of the author and may not represent the views of The Crypto Basic. Readers are encouraged to conduct their own research before making investment decisions. The Crypto Basic is not liable for financial losses.