Amount of Ethereum Staked Nears Record High as ETF Approval Draws Closer

As approval of an ether (ETH) exchange-traded fund (ETF) in the United States draws closer, the amount of staked ether is nearing record levels, keeping circulating volume in check despite the fact that the total supply of ETH is increasing again.

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Rise of staked ether

According to data from CryptoQuant the total amount of staked ETH currently sits at 33 million, which is roughly 27% of the total supply. Julio Moreno, Head of Research at CryptoQuant, notes that this surge in ether is a sign that it has become an inflationary asset again, undermining its ability to function as a store of value.

ETH Supply Development

While the supply of ether is growing slowly, there are ways to combat this, such as staking and burning a portion of the transaction fees paid by users. Data from CoinMetrics show that about 12% of the ETH supply is used in smart contracts or bridges that connect blockchains. Together with the staked tokens, about 40% of the cryptocurrency is ‘locked up’ and not actively traded.

Road to the ETH ETF

The race to launch an ether ETF seems to be heating up and bettors on Polymarket believe trading will start before July 26. Recently, Invesco and Galaxy announced that they will launch an management fee of 0.25% will charge for their proposed spot ether ETFs, slightly higher than VanEck’s 0.20%.

Investor expectations

Before trading can begin, the SEC must provide feedback on the current filings, and issuers must file final amended forms detailing fees and other required details. On Kalshi, bettors are giving ether a 65% chance that it will outperform bitcoin, but they are 95% certain that ether won’t reach a new high before its larger competitor does.

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