🔵 What Does Ethereum’s Staking Record Signal for the Asset?
Not long after the U.S. Securities and Exchange Commission clarified its stance on staking, investors have dedicated a record amount of Ethereum to the network.
The amount of Ethereum pledged toward validating network transactions crossed 35 million on Tuesday, an all-time high representing 28.3% of the asset’s circulating supply, according to a Dune dashboard created by Dragonfly Capital data scientist Hildebert Moulié. At the same time, the number of validators earning rewards reached 1.1 million—a new record.
Although liquid staking solutions exist, the high water mark suggests conviction is growing for Ethereum, Carlos Guzman, a research analyst at crypto market maker GSR.
“It dovetails with market expectations around ETH turning more optimistic and positive,” he said “People are maybe expecting the price to go up in the future, and therefore feeling more confident in terms of holding the asset.”
Late last month, Wall Street’s top cop said in a statement that it does not view staking activities as securities transactions, noting that a lack of clarity “artificially constrained participation in network consensus and undermined the decentralization [...] of proof-of-stake blockchains.”
Although former SEC Chair Gary Gensler posited in 2022 that proof-of-stake assets could themselves be securities, the statement signaled individuals and institutions could participate, as asset managers seek to integrate staking rewards into exchange-traded funds.
Liquid staking protocols, such as Lido, allow a user to lock up their Ethereum, in exchange for a token pegged to the asset’s price, while still being able to earn rewards. Crypto asset manager Galaxy Digital said on Tuesday that it would work to bring staking to institutional investors.
Ethereum was recently changing hands around $2,500, a 5.4% decrease over the past day. As of Tuesday, the amount of Ethereum staked is worth $90 billion, based on current prices.