Ethereum (ETH) staking is approaching record levels, driven by increasing rewards and the imminent launch of spot Ethereum ETFs in the U.S.
Ethereum (ETH) staking is approaching record levels, driven by increasing rewards and the imminent launch of spot Ethereum ETFs in the U.S. According to data from Beaconchain, over 33.2 million Ethereum tokens, valued at approximately $114 billion, are currently staked. This represents about 28% of the total ETH supply. ETH is currently trading at $3,419, down 1.97% in the past 24 hours.
The rise in staked ETH aligns with a nearly 5% increase in the estimated reward rate for staking Ethereum over the past month. Staking involves locking up ETH for a specified period to help secure the proof-of-stake network, in exchange for rewards. As of now, the estimated reward rate is 2.60%, up from 2.48% a month ago. Ethereum staking has been steadily increasing, surpassing 30 million ETH in February and reaching an all-time high of over 33.4 million ETH on July 12, according to on-chain data from Dune.
Despite the allure of staking rewards, the substantial amount of staked ETH has raised centralization concerns. Platforms like Lido command 29% of all staked ETH, along with significant stakes held by Coinbase and other entities.
Investor interest in staking is also buoyed by the anticipated approval of multiple spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC). However, the exchange-traded funds, which differ from their underlying asset, won't be able to be staked, yet they are expected to attract significant investor interest.
Some analysts predict that inflows into these new Ethereum ETFs might be modest. A recent Citi research report indicates that spot ETH ETFs in the U.S. could receive only 30% to 35% of the net inflows seen by their Bitcoin counterparts, with a potential skew towards lower inflows.
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