On August 14, the ETH ($ETH) staking market experienced rare turbulence. According to DeFi analyst Ignas, there are currently up to 671,000 ETH (approximately $3.2 billion) waiting in line for withdrawal, setting a new historical record for the network, with wait times extending to 12 days. This wave of withdrawals is drawing significant attention in the market regarding leveraged liquidations, arbitrage strategies, and potential upcoming ETH staking ETFs.
ETH staking withdrawals surge, who is retreating?
The current surge in withdrawal queues is closely related to multiple market changes. According to Ignas' post, this wave may be related to several key factors:
Liquidation of leveraged positions.
Arbitrageurs taking profits.
Institutional positioning for the upcoming ETH staking ETF.
Currently, ETH waiting in line for withdrawal is mainly from the three major liquid staking platforms:
Lido: 285,000 ETH.
EtherFi: 134,000 ETH.
Coinbase: 113,000 ETH.
Among them, Lido's stETH withdrawal demand has surged, with queues reaching a historical high, indicating that its liquidity is under pressure.
July turbulence triggers a chain reaction.
The trigger for this wave of staking withdrawals can be traced back to July. At that time, well-known figure Justin Sun withdrew up to $600 million worth of ETH from the Aave lending platform, causing Aave's borrowing annual interest rate to skyrocket. As the interest rate soared, many common leveraged staking strategies (such as using stETH as collateral to borrow ETH for circular staking) became unprofitable.
Although Aave's interest rate has now fallen back to 2.65%, the market appears to stabilize on the surface, yet many investors choose to take profits or reduce risk exposure, leading to a continuous rise in the number of withdrawals.
Is the risk of stETH decoupling re-emerging? The DeFi ecosystem is sounding the alarm.
stETH once decoupled from the ETH market price by 0.3% in July, attracting arbitrageurs to capitalize on the price difference for staking withdrawals. Although the extent was not large, it evoked collective memories of the 2022 crash event in the market.
According to RedStone's Marcin analysis, there are currently 278,000 wstETH (wrapped stETH) marked as 'high risk', with a health factor between 1 and 1.1, meaning that once the price decouples again, it may trigger a chain liquidation.
Fortunately, most lending platforms (such as Aave, Morpho, Euler) have not adopted real-time market prices as the liquidation standard, but still maintain the standard valuation of 1 stETH = 1 ETH, temporarily avoiding further entrenchment of the DeFi system in a 'death spiral'.
However, Aave's leveraged circular positions alone amount to as much as $4.74 billion, while the daily trading volume of stETH is only $230 million. This leverage structure, once impacted, will have far-reaching consequences.
ETH staking ETF is coming, will institutional funds shift to centralized options?
In addition to arbitrage and liquidation pressures, the market is also highly focused on the possibility that institutional investors are preemptively positioning for the upcoming ETH staking ETF. According to reports, the world's largest asset management company BlackRock has submitted an application to the SEC in July 2025 to incorporate staking functions into its ETHA ETF.
Analyst DukeD pointed out on X that most institutions prefer centralized custody platforms like Coinbase or choose offline staking, as this better complies with regulatory oversight and is easier to audit and report.
This will pose substantial competitive pressure on decentralized staking platforms like Lido. Lido currently holds about 28% market share; if ETFs adopt self-built or centralized solutions in the future, its market share and influence may be diluted.
The market remains resilient, but systemic risks must be heeded.
Despite short-term market turbulence, Galaxy Digital's report indicates that ETH treasury yields and ETF capital inflows are gradually absorbing selling pressure. After the withdrawal queue is cleared, wait times are expected to return to normal levels.
Ignas urges the community to avoid unnecessary panic (FUD) and focus on the underlying capital flow logic and changes in leverage allocation. He emphasizes that the changes in the staking withdrawal queue are an important indicator of the overall stability of the Ethereum ecosystem.
The next chapter of Ethereum is determined by ETFs, leverage, and decentralized gaming.
This wave of withdrawals, whether for arbitrage, leveraged liquidations, or institutional positioning for ETFs, reflects that the Ethereum staking ecosystem is at a critical turning point. The future struggle between decentralized staking platforms and traditional finance will determine the direction of the market. While Ethereum still shows high resilience, its stability and security are facing severe tests in light of historically high withdrawal data and hidden leverage risks.
This article is authorized for reprint from: (Chain News).
Original title: (Ethereum withdrawals reach historical peak! Up to $3.2 billion waiting to be withdrawn, is the market trend changing?)
Original author: Elponcho.
‘Ethereum withdrawals reach historical peak! Up to $3.2 billion waiting to be withdrawn, is the market trend changing?’ This article was first published in ‘Crypto City’.
