Over 30 Million ETH Locked in Staking on the Beacon Chain, Valued at Over $85 Billion, Representing Nearly 25% of the Total Circulating Supply
The total amount of ETH locked in staking has surpassed 30,690,000 ETH, worth over $85 billion, which locks up almost 25% of the total circulating supply. The Beacon Chain currently has 950,000 active validators.
February has been a bullish month for the Ethereum network, with a significant increase in deposits to the Ethereum 2.0 staking contracts, reaching 600,000 Ether between February 1st and 15th. This period also saw the price of ETH reach new yearly highs above $2,800.
Security, Efficiency, and Supply Reduction
Locking a quarter of the circulating supply in proof-of-stake (PoS) contracts is seen as a bullish sign for the Ethereum network. The increase in ETH staking enhances the security and efficiency of the network and reduces the supply of ETH available for trading on exchanges, resulting in a decrease in supply amid growing demand.
The introduction of PoS to the Ethereum ecosystem through the Beacon Chain, during its merge with the original proof-of-work (PoW) chain in September 2022, allowed validators to stake ETH. Currently, the annual reward rate for ETH stakers is approximately 4%.
Post-Shanghai Perspectives and Institutional Demand
After the Shanghai upgrade in April 2023, which allowed validators to withdraw their staked ETH, there were high expectations for significant withdrawals. However, the amount of newly placed ETH in staking exceeded the withdrawals in the week following the Shanghai upgrade.
The price of ETH has experienced a sharp increase in recent weeks, rapidly approaching the $3,000 threshold. With the approval of Bitcoin Spot ETFs in the United States, attention is now shifting to Ethereum Spot ETFs and their potential approval by the SEC.
