Outflow of 634,920 ETH from validators on the Ethereum network occurs after a 160% rise in the asset.
The Ethereum network is about to experience the largest recorded outflow from its staking system, totaling 634,920 ETH, equivalent to approximately R$ 12.7 billion.
The amount is even greater than the peak in January 2024, extending withdrawal delays to more than 10 days, according to data from validatorqueue.
The numbers suggest a possible signal that participants are looking to withdraw funds to take profits after a surge in ETH, which has more than doubled in price since April, going from around $1,600 to the current $3,600.
But not all users can exit staking at the same time. The congestion is due to the dynamics of Ethereum's proof-of-stake (PoS) model, which limits how quickly validators can enter or exit the network. Validators are entities that stake tokens to help secure the blockchain in exchange for a reward.
According to Andy Cronk, co-founder of Figment who spoke to CoinDesk, when prices rise, investors unstake and sell ETH to secure profits, as observed by him over many cycles. Staking peaks may also occur when large institutions transfer custodians or change their wallet technology.
For his part, David Shuttleworth, a partner at Anagram, said that behind this dynamic there may be a mix of older investors capturing profits, as well as investors shifting to a reserve strategy.
Ethereum in institutional high
Companies like SharpLink and Bitmine, focused on ETH treasury, have been buying large volumes of the asset, according to Matthew Sheffield from FalconX. He points out that the acceptance of in-kind contributions may have led investors to unstake in order to participate in these operations.
Justin Sun, founder of Tron, also contributed to the movement by requesting the withdrawal of 60,000 ETH from Lido, according to data from Arkham.