The world’s second-largest cryptocurrency by market capitalization Ethereum (ETH) has seen the amount of ETH staked within Ethereum 2.0 surge to a new all-time high of 47.38 million ETH, equivalent to 33.9% of the cryptocurrency’s supply.
According to data from on-chain analytics firm Santiment, the figure has more than tripled from around 10.9% of the cryptocurrency’s supply held in the ETH2 Beacon Deposit Contract two years ago, and now stands at over $140 billion.
🤯 The ETH2 Beacon Deposit Contract, used for staking deposits for Ethereum 2.0, now holds an all-time high 47.36M ETH, This is good for 33.9% of the entire supply, and more than tripling since the 10.9% it held two years ago. pic.twitter.com/aCnEhfClfb
— Santiment (@santimentfeed) July 10, 2024
Staking in Ethereum 2.0 surged as more users allocated their funds to become validators, who lock up their ETH to help secure the network in its new Proof-of-Stake consensus algorithm. In return, they earn staking rewards, but ETH remains a deflationary cryptocurrency as an earlier upgrade meant transaction fees are burned.
Santiment’s data also highlights a shift in how Ethereum is held. Wallets containing over 10 million ETH or more – meaning the Beacon Deposit Contract – have seen their share of the total supply increase by 23% in the past two years. Conversely, holdings in smaller and mid-tier wallets (excluding the Beacon Deposit Contract) have declined, suggesting a movement towards staking.
As reported, long-term ETH investors are now holding around 78% of the cryptocurrency’s circulating supply, which means that buyers who have been holding onto their funds for more than a year now control the majority of circulating ETH.
These long-term investors are less likely to sell their coins compared to those who have held them for a shorter period. The trend of LTH dominance is seen as a bullish sign for Ethereum, suggesting growing confidence among investors, with the significant concentration they now have effectively taking a significant amount of the cryptocurrency out of circulation, limiting potential downward pressure on the price.
Featured image via Pixabay.
