Ether staking deposits surge to $85B, locking up 25% of the circulating supply

The price of Ether has gone up significantly as staking demand has increased, reaching a new yearly high of more than $2,800.The entire quantity of invested Ether in the Beacon Chain has reached 30,206,801 ETH, which is valued at much more than $85 billion. accounting for nearly 25% of the total circulating supply. There are presently 943,974 active validators on the Beacon Chain.

So far, the Ethereum network has had a positive month in February. From February 1 to 15, investors placed 600,000 Ether into Ethereum 2.0 staking contracts.

In February, the ETH price reached yearly highs of more than $2,800. Ether is now trading at $2,774.

Locking 25% of the total supply in proof-of-stake (PoS) contracts is considering beneficial for the Ethereum network. Staked Ethereum increases the security and efficiency of the network. It decreases the amount of Ethereum that can traded on exchanges, leading to a supply shortage in the face of increasing demand.

After merging with the original Ethereum proof-of-work chain in September 2022, the Beacon Chain brought proof-of-stake to the Ethereum ecosystem by enabling validators to stake ETH. As of right now, holders of ETH receive an annualized reward rate of 4%.

Impact of Spot Ether on Ethereum Supply and Market Dynamics

The validators that monitor the Ethereum PoS network are require to stake 32 ETH. Presently, the Beacon Chain currently has over 900,000 validators, up from 21,063 on launch.

Certain individuals project that validators would be in great demand to withdraw their staked Ethereum following the April 2023 Shanghai upgrade. The number of newly staked Ethereum, however, exceeded the number of withdrawals within a week of the Shanghai upgrade, suggesting that validators were re-staking their Ethereum for passive revenue.

ETH’s price has risen over the last few weeks, achieving double-digit gains and approaching the $3,000 threshold. The focus is now on spot Ether exchange-trade funds and whether the U.S. Securities and Exchange Commission will approve them after spot Bitcoin ETFs recently approved in the country.

The second-largest cryptocurrency may significantly impacted by spot ether exchange-traded funds (ETFs), as institutional demand for ETH contributes to the decreasing market supply.