Recent on-chain data reveals a notable growth in Ethereum staking over the past month, signaling a positive trend for the Ethereum ecosystem which is already showing a bullish sentiment as we approach July.
Almost 60,000 New Depositors Join Ethereum Network
Data from CryptoQuant indicates that 59,894 unique depositors have entered ETH’s staking network since May 20. This uptick coincided with Bloomberg analysts James Seyffart and Eric Balchunas raising the approval odds for the Ethereum ETFs, further boosting the staking network.
The positive impact of the Ethereum ETFs on ETH, despite not being traded yet, has led to a 4% increase in staking participation within slightly over a month. This surge in staking contributes to the decentralization of the network, which is favorable for Ethereum.
Additionally, the rise in new depositors will further reduce the circulating supply of ETH as these depositors need to lock up a significant amount of ETH to become validators. Approximately, over 33 million ETH is currently locked up, constituting nearly 28% of Ethereum’s total supply.
ETH’s Reduced Supply Favors a Bullish Outlook
The decrease in Ethereum’s circulating supply is advantageous as it mitigates potential selling pressure on the digital asset. Moreover, the positive impact of locked-up tokens becomes more pronounced with increasing demand for Ethereum since ETH’s price is influenced by the interplay between supply and demand.
The distribution of ETH also suggests a bullish scenario for the crypto token. Data from IntoTheBlock reveals that about 78% of ETH’s supply, including staked ETH, is held by long-term holders who have retained the crypto asset for over a year.
This concentration of Ethereum’s supply in the hands of long-term holders signals stability, especially as institutional investors are anticipated to ramp up their demand for ETH once the Ethereum ETFs commence trading, expected to start this month.
Bitwise’s Chief Investment Officer, Matt Hougan, has recently projected that the Ethereum ETFs could attract $15 billion within their initial 18 months of trading.
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