Ethereum (ETH) staking has hit a major milestone with more than 28% of the altcoin now staked. Staking is a major metric that helps define the adoption of Ethereum since the protocol transaction to the Proof-of-Stake (PoS) consensus model. With the latest milestone, Ethereum has maintained its stance as the pioneering smart contract network.
According to data from Glassnode and Cryptoquant.com, 28% of the total ETH is now staked. About 10% of Ethereum volume is left on cryptocurrency exchanges drawing inferences of scarcity.
Leon Waidmann, Head of Research at the non-profit organization Onchain Foundation, stated that the broader crypto industry on X is yet to fully understand the implications of this move.
#ETHEREUM STAKING ALL-TIME HIGH!
🔹 OVER 28% of total #ETH is now staked.
🔹JUST 10% on exchanges.
Crypto X hasn’t fully grasped the significance of this yet.
Scarcity like never before, eclipsing all past bull runs!
🚨A massive $ETH price surge is in the making! pic.twitter.com/aBIWItYaXx
— Leon Waidmann | Onchain Insights🔍 (@LeonWaidmann) July 29, 2024
It is worth noting that this kind of high staking percentage could trigger intense scarcity for ETH in the market. This is a clear sign of a supply crunch waiting to happen. Should this eventually take place, Ethereum may well be on its way to hitting the $4,000 target that analysts have looked forward to.
In May, the total Ethereum staked surpassed lingered at 32.5 million ETH, amounting to a total of $121 billion. At the time, data from on-chain data tracking avenue Nansen showed that this reserve constituted approximately 27% of Ethereum’s total supply. There were speculations about a potential supply crunch with far more reaching implications for the broader market.
At the time, spot Ethereum ETF issuers were yet to receive approval from the United States Securities and Exchange Commission (SEC). Therefore, Nansen noted that “If an ETH ETF gets approved and there is demand, either in anticipation or after approval then this would be positive.”
Nansen analysts seemed certain that approval of a Spot Ethereum ETF could significantly boost demand for ETH. This, they believe will further constrain supply and potentially driving up prices.
The spot Ethereum ETF approval finally came on May 23 and trading commenced two months after on July 23. Now, the staking volume has increased by 1%, further suggesting scarcity. On one hand, institutional interest in Ethereum is obviously improving. This sentiment is evident in the over $2 billion inflows that spot Ethereum ETFs have recorded so far.
In a report shared by blockchain analytics firm CoinShares, the launch of the spot Ethereum ETFs raked in over $2.2 billion in inflows into the crypto market. To this end, Ethereum price is signaling a positive sentiment with a 1.92% increase in the last 24 hours.
At press time, ETH price is changing hands for $3,335.15. Eventually, the crypto may need that staking-fueled supply crunch to test new highs.
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