This week, the supply of staked Ether reached an all-time high, signaling growing confidence among investors in the second-largest cryptocurrency. Over 35 million ETH are now staked on the Ethereum blockchain, indicating a significant reduction in the liquid supply of the market.
Growth of Ethereum Staking Market
Currently, more than 28.3% of the total Ether supply is locked in smart contracts, rendering it unsellable for a predetermined time in exchange for generating passive income. Over 500,000 ETH was staked in the first half of June, indicating 'rising confidence and a continued drop in liquid supply,' according to CryptoQuant author Onchainschool.
Role of Institutional Investors
The number of Ether accumulation addresses, or holders with no history of selling, reached an all-time high of 22.8 million. This signals that Ethereum is among the 'strongest crypto assets in terms of long-term fundamentals and investor conviction,' the analyst noted.
Criticism and Risks of Centralized Staking
Over 25% of the 35 million staked Ether tokens have been deployed through the liquid staking protocol Lido. Binance and Coinbase also play significant roles, holding 7.5% and 7.4% of staked Ether respectively. The recent rise in staking comes amid a more favorable regulatory outlook in the US, however, industry participants are still waiting for the approval of the first Ether staking ETFs.
The rise of staked Ether to record levels reflects growing investor confidence and changes in the market driven by both internal factors and regulatory influences. Nonetheless, criticism regarding the potential for centralized staking remains relevant.
