Ethereum is once again at the forefront, with new statistics revealing that the ETH staked in contracts has reached an unprecedented high.
Currently, over 35 million ETH are locked in staking contracts, representing more than 28.3% of the overall circulating supply. This significant milestone not only reflects growing confidence in Ethereum’s long-term profitability but also signals a dangerously low available supply in the crypto market.
Despite recent fluctuations in price, major investors—often referred to as whales—are seizing the opportunity to significantly increase their ETH holdings. While short-term market sentiment appears mixed, three key trends are clear: (1) growth in staking activity, (2) an increase in whale activity, and (3) rising institutional interest. Together, these factors suggest a positive shift in Ethereum’s market outlook.
Record ETH Staking Decreases Liquid Supply
Since transitioning to a proof-of-stake model, Ethereum’s staking numbers have been steadily rising. The recent surge to 35 million ETH staked marks a new all-time high, accounting for over 28% of Ethereum’s total supply, indicating strong commitment from holders towards the network’s long-term development and security. Consequently, the amount of ETH available for trading on exchanges is significantly reduced.
The liquid supply of ETH is currently tightening for two main reasons: firstly, the demand for liquidity in the Ethereum ecosystem is typically higher in the latter half of the year; and secondly, large-scale liquidations of staked ETH are less frequent, leading to more ETH being locked in staking contracts. This trend is creating an increasingly inelastic supply of ETH, meaning that any notable increase in demand could lead to significant price surges.
Additionally, traditional finance is showing greater interest in cryptocurrencies. A growing number of companies listed on the Nasdaq have begun to incorporate cryptocurrencies like ETH and BTC into their treasury management strategies, signifying greater recognition of crypto assets as long-term stores of value.
Whales Reaffirm Commitment Despite Market Dip
The long-term value proposition of Ethereum is further bolstered by active whale engagement. One prominent investor, identified by wallet address 0xd8d0, has returned to the market after previously securing over $30 million in profits on ETH. This investor, reacting to the recent dip in ETH’s price, purchased 30,000 ETH, totaling approximately $73 million at the time of the transaction.
This wallet has refrained from spending almost $295 million USDC since June 11, amassing a total of 115,465 ETH. The average purchase price of this ETH was $2,555, although the wallet’s current holdings are approximately $15 million down.
Another significant player, using wallet address 0x7055, recently borrowed $10 million USDC from decentralized lending platform Aave to acquire 4,170 ETH at a price of $2,400. Previously, on June 12, this whale spent 86.79 million USDC to obtain 31,458 ETH at $2,759.
These actions suggest a strategy of capitalizing on short-term volatility to accumulate ETH at what these investors perceive to be favorable prices. Historically, such accumulation by major players during periods of low retail enthusiasm has indicated potential bullish movements ahead.
Constricting Supply Meets Strategic Accumulation
High levels of staking, aggressive buying by whales, and increasing corporate adoption are collectively painting a bullish picture for Ethereum. Despite recent price stagnation, over a quarter of the total ETH supply is now locked in staking, while the amount available for immediate sale continues to dwindle—thanks in large part to significant purchases by large investors.
This accumulation by whales, especially amid a decreasing supply of liquid assets, often serves as a precursor to upward price movements. Notably, these large holders tend to act in advance of the broader market, placing buy orders discreetly to benefit when prices rise.
Moreover, Ethereum continues to offer staking rewards, further enhancing its appeal as an asset that generates returns. This feature encourages long-term holding, as investors can now potentially earn multiple types of rewards from their holdings.
Overall, Ethereum’s fundamentals are solidifying, marked by the participation of network validators, user activity, and the investing patterns of various stakeholders. Yet, despite these positive foundational elements, the price of ETH has been on a downward trajectory. This situation does not negate the overall bullish context being formed, indicating a complex market dynamic for Ethereum.