Record High Staking Levels as Ethereum ETF Nears Approval in the US

Record High Staking Levels as Ethereum ETF Nears Approval in the US

As an Ethereum (ETH) exchange-traded fund (ETF) inches closer to approval in the US, the amount of staked ether is approaching record levels, keeping the circulating volume in check despite the overall growth of ETH in circulation.

Julio Moreno, CryptoQuant’s head of research, noted in a statement shared with CoinDesk that “the total number of staked ETH has continued to increase and is near its all-time high, currently at 33.3 million ETH or 27.7% of the total supply.”

The growing supply of Ethereum, the second-largest cryptocurrency, indicates its return to an inflationary state, potentially weakening its ability to serve as a long-term store of value. However, methods like staking, which locks ether for a set period, and burning—a process that permanently removes a portion of transaction fees from circulation—can help counter this effect.

“ETH supply is growing again, albeit slowly. The narrative of ultra-sound money has ended. The total supply is now at its highest level since December 11, 2023,” Moreno explained.

He also mentioned that spot trading volume data suggests that ether could be as liquid as bitcoin (BTC), with ETH’s spot trading volume reaching 80%-90% of bitcoin’s in recent weeks.

Additionally, data from CoinMetrics indicates that around 12% of ether’s supply is utilized in smart contracts or blockchain bridges. When combined with the staked tokens, approximately 40% of Ethereum’s supply is “locked” and not actively traded.