Staked Ether in Beacon Chain Exceeds $85 Billion, Boosting Ethereum amid Increasing Institutional Demand
Summary:
Ethereum's proof-of-stake (PoS) network, the Beacon Chain, has seen its staked Ether reach over $85 billion, equivalent to nearly a quarter of the total circulating supply. The first half of February proved beneficial, with an additional 600,000 ETH staked and significant price gains observed. The network is now operated by over 900,000 validators. Ethereum's shift to PoS has made transactions more secure and efficient, consequently reducing the freely tradable supply amid a rise in demand, hence inflating price. Additionally, while Bitcoin's spot ETF approval has already occurred, the cryptocurrency community is eagerly awaiting a similar approval for Ethereum, which could significantly boost the cryptocurrency with increased institutional demand.
The Beacon Chain, Ethereum's proof-of-stake (PoS) network, now hosts more than 30,206,801 staked Ether, translating to over $85 billion. This accumulation signifies almost a quarter of the total Ether in circulation. Further, the Beacon Chain supports 943,974 active validators. The first fifteen days of February have been especially favorable for Ethereum, with users adding 600,000 ETH to active staking contracts during this period. Ethereum also experienced price surges, hitting new annual peaks above $2,800, with the current trading price around $2,774.
Having a quarter of the circulating Ether locked in PoS contracts is a positive development for the Ethereum network, given it strengthens its integrity and functioning while also reducing freely tradable supply on exchanges. This is significant amidst an increasing demand scenario.
Launched in 2022 and marking the transition from a proof-of-work (PoW) to a PoS protocol, the Beacon Chain has been a significant leap for Ethereum. Validators contribute Ether to stake in the network, with the promising offer of an annual reward rate of 4%. To join the network as a validator, there's a requirement to stake 32 Ether in the network's smart contract. The Beacon Chain initially started with 21,063 validators, but now boasts of more than 900,000 validators.
The April 2023 'Shanghai' upgrade allowed validators to withdraw their staked Ether. Despite initial concerns of a potential rush for withdrawals, the amount of ETH restaked exceeded withdrawals in the first week after the upgrade, proving the sceptics wrong. This indicates the ongoing benefit perceived by validators in staking Ether for passive income generation.
Recent trends suggest that the price of Ether could be poised for new growth, with double-digit increases seen in the past few weeks and the $3,000 mark now within reach. Moreover, with Bitcoin's spot ETF recently gaining approval, anticipation is growing for Ethereum's spot ETFs to receive the same green light from the Securities and Exchange Commission. Success in this regard may significantly boost the cryptocurrency, thanks to potential increased institutional demand set against a declining market supply due to active staking.
Published At
2/15/2024 12:16:11 PM
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