Ethereum
Ethereum in play hits 27% of supply as ETF trading looms
As the cryptocurrency market eagerly awaits the potential launch of the spot Ethereum In the United States, a staggering 32.6 million ETH, or over 27% of the total supply, is now used to secure Ethereum. proof of stake networkaccording to the latest data from Coinbase.
The milestone underscores the growing enthusiasm for Ethereum staking, even as the ecosystem grapples with the implications of the long-awaited Ethereum ETFs. The new exchange-traded funds, unlike their underlying asset, will not be able to stake their holdings due to regulatory constraints.
The rise in ETH staked has been steady, with a brief slowdown following the Shanghai upgrade in spring 2023. At the time of writing, Ethereum is trading just below $3,000, down 14% over the past week amid broader market volatility.
The SEC’s approval process for Ethereum ETFs has been slower than initially expected. James Seyffart, ETF analyst at Bloomberg noted on Twitter (aka X), “We think these things could potentially be listed later next week or the week of the 15th at this point.”
This comes after Bitwise Files Amended Form S-1 ahead of the July 8 deadline, potentially indicating the products are nearly ready to launch. VanEck then filed its own amended S-1 on Monday.
Evan Van Ness, a prominent Ethereum researcher, gave his take on the staking situation. “We certainly don’t need that much ETH staking, given that Ethereum’s proof-of-stake provides much more economic security than proof-of-work,” he told Decrypt.
He also warned of the risks of centralization: “If your staking pool runs on a majority client or runs in the cloud, you are putting your ETH at risk.”
The inability of ETFs to participate in staking has sparked innovative approaches from traditional financial players. Franklin Templeton, which manages $1.6 trillion in assets, plans to launch a fund focused on altcoins and staking rewards, anonymous sources familiar with the matter said. The information.
Ethereum staked, source: Beaconcha.in
Meanwhile, Toronto-based Purpose Investments already has an Ethereum fund that is allowed to stake the underlying ETH.
“We have always been excited about Ethereum and what the technology and ecosystem represents,” he said in a statement. Press release“Initially, a corporate structure was the best option; today, we believe an ETF is the most efficient.”
The buzz around Ethereum staking and ETFs also raises questions about the future of the ecosystem. As more institutional players get involved in staking and the percentage of staked ETH increases, the Ethereum community will be closely monitoring the impact of these developments on the security, decentralization, and overall health of the network.
Danny Ryan, a researcher at the Ethereum Foundation, shared his thoughts on the economics of staking at the EthStaker Staking Roundup last year. “Staking on Ethereum is driven by the reward curves and overall economic incentives built into the protocol,” he said“The goal is to create a sustainable and secure system that encourages participation and preserves the integrity of the network.”
The recent market slowdown, attributed to factors such as the impending Mt. Gox Refunds And macroeconomic concernsBitcoin fell back below $55,000 on Sunday, after nearly touching $54,000 on Friday, its lowest level since late February. The volatility underscores the complex interplay between staking trends, ETF anticipation and broader market forces.
For now, the 24 = 7% staking milestone is a testament to the growing conviction among ETH holders that staking is the future. It’s not yet clear whether that future will directly include ETFs or whether it will be shaped by a new generation of staking-focused funds and companies. As the crypto world holds its breath for the SEC’s final decision, the stage is set for a potentially transformative moment in Ethereum’s history.
Edited by Stacy Elliott.