Ether staking deposits touch $85B, with 25% of circulating supply now locked up

Amid growing staking demand, ETH price has made significant strides reaching a new yearly high above $2,800.

The total amount of staked Ether in the Beacon Chain has reached 30,206,801 ETH worth over $85 billion, locking up nearly 25% of the total circulating supply. Currently, there are 943,974 active validators on the Beacon Chain.

February has been bullish for the Ethereum network as between Feb. 1 and Feb. 15, investors deposited another 600,000 ETH into Ethereum 2.0 staking contracts. February also saw ETH price surge to new yearly highs above $2,800. It is currently trading at $2,774.

A quarter of the circulating supply locked in proof-of-stake (PoS) contracts is a bullish sign for the Ethereum network. The rise in the staked ETH adds to the network’s security and efficiency. It reduces the supply of ETH available to trade on exchanges, leading to a reduced supply amid growing demand.

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The Beacon Chain introduced PoS to the Ethereum ecosystem. It was merged with the original Ethereum proof-of-work (PoW) chain in September 2022, allowing validators to stake ETH. Currently, ETH stakers get an annualized rewards rate of 4%.

The Ethereum PoS network is run by a group of validators who had to stake 32 ETH into the smart contract. The Beacon Chain started with 21,063 validators and currently boasts over 900,000 validators.

After the Shanghai upgrade in April 2023, validators could withdraw their staked ETH. Many critics were skeptical and believed there would be a high demand for withdrawals from validators. However, within a week of the Shanghai upgrade, the number of staked ETH outpaced the number of withdrawals, indicating that validators were restaking their ETH for the passive income.

ETH price has made significant strides over the past few weeks, making double-digit gains and eyeing the $3,000 mark. With spot Bitcoin ETF now approved, all eyes are set on spot ETH ETFs and whether they will also gain the Securities and Exchange Commission’s nod. Spot ETH ETFs could be a vital catalyst for the second-largest cryptocurrency as it could create an additional institutional demand amid declining market supply due to staking.