ETH Holdings on Exchanges Decline as Staking Activity Surges Despite Flat Prices
The amount of Ether on cryptocurrency exchanges continues to drop as investors increasingly turn to staking, creating lengthy validator waiting periods while institutions such as Bitmine secure millions of tokens.
The volume of Ether stored on cryptocurrency exchanges has experienced a significant decrease throughout the past six months even as ETH's price has remained relatively stable, with token holders increasingly choosing to engage in staking activities, data from Santiment reveals.
According to a Tuesday post on X by Santiment, information from Sanbase indicates that following July's peak of 12.31 million Ether (ETH) tokens held on exchanges, there has been a consistent downward trend to the current level of 8.15 million.
Market analysts from Santiment anticipate that the volume of Ether stored on exchanges is likely to continue its downward trajectory as price activity stays subdued and additional ETH tokens are transferred for staking purposes. Over the past seven days, Ether's value has fluctuated within a range of $2,801 to $3,034, data from CoinGecko shows.
As staking continues to be of strong interest, especially while markets move sideways, exchange supply will continue to shrink as well.
Ether staking entry queue has a 63-day wait
As of Thursday, the Ethereum Validator Queue blockchain explorer shows the entry queue is completely saturated, with approximately 3.6 million tokens queued for staking and an anticipated waiting period of 63 days, while only 44,448 tokens are waiting to be withdrawn with an 18-hour processing time.
To maintain network stability and security, the Ethereum network enforces restrictions on the number of validators that can join or leave the staking process during each epoch.
Data from beaconcha.in and Dune Analytics indicates that the cumulative amount of staked Ether has surpassed 36 million tokens, accounting for approximately 29% of the total supply, marking an increase from 35 million recorded in June.
As a proof-of-stake network, Ethereum mandates that validators must stake tokens to contribute to network security. The act of unstaking is frequently interpreted as an indicator that validators intend to release Ether for potential sale, whereas staking activity may signal holder confidence in the asset's future, given that it necessitates tokens to remain locked.
Tom Lee's Bitmine has 2.5 million ETH staked
The company Bitmine continues to increase its treasury allocation toward staking activities. According to a report from data analytics company Lookonchain, Bitmine has staked an additional 250,912 Ether from its corporate reserves.
Lookonchain's calculations suggest that Bitmine has now committed more than 2.5 million tokens to staking, which constitutes approximately 61% of the company's entire holdings.
The institutional Ether treasury firm initiated its staking operations in December, beginning with an initial transfer of 74,880 Ether.
Some stakers are accumulating Ether
Certain Ether stakers seem to be actively increasing their token holdings. On Tuesday, Lookonchain observed that four staking-associated wallets removed more than 26,000 tokens from the Binance exchange and suggested these entities were engaged in accumulation activities.
On Thursday, the trading volume for Ether recorded on CoinMarketCap stood at approximately $23.54 billion, representing a decline from the previous day's figure of more than $27 billion.