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

Amid growing staking demand, the price of Ether 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, which is worth over $85 billion, locking up nearly 25% of the total circulating supply. There are currently 943,974 active validators on the Beacon Chain.

February has been a bullish month for the Ethereum network so far. Between Feb. 1 and 15, investors deposited 600,000 Ether (ETH) into Ethereum 2.0 staking contracts. February also saw the ETH price surge to yearly highs above $2,800. Ether is trading at $2,774 at the time of writing.

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

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The Beacon Chain introduced PoS to the Ethereum ecosystem when it 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, which had to stake 32 ETH. The Beacon Chain started with 21,063 validators but currently boasts over 900,000 validators.

After the Shanghai upgrade in April 2023, validators could withdraw their staked ETH, with several critics believing there would be a high demand for withdrawals by validators. However, within a week of the Shanghai upgrade, the amount of newly staked ETH outpaced withdrawals, indicating validators were restaking their ETH for the passive income.

The price of ETH has rallied in the past few weeks, making double-digit gains and eyeing the $3,000 mark. With spot Bitcoin exchange-traded funds now approved in the United States, attention is turning to spot Ether ETFs and whether the U.S. Securities and Exchange Commission will also approve them. Spot Ether ETFs could have a significant impact on the second-largest cryptocurrency, with institutional demand for ETH adding to declining market supply.