Total Ethereum Staked Exceeds $121B ETH, Supply Crunch Incoming?
Ethereum (ETH) registered a phenomenal surge lately owing to the enhanced approval odds of ETH ETFs. Moreover, signs of a supply crunch were noted owing to massive Ether reserve being locked up for staking. A supply shock could potentially drive the ETH price toward the $4,000 target.
Total Ethereum Reserve Staked Surpasses $121 Billion
According to Nansen, an on-chain data tracking avenue, 32.5 million ETH is currently staked. Moreover, this reserve constitutes approximately 27% of Ethereum’s total supply. At prevailing market prices, this staked ETH is valued at a staggering $121 billion.
To provide context, Nansen compared this figure to Solana’s total Fully Diluted Valuation (FDV), which stands at $103 billion. The substantial quantity of Ethereum being staked has sparked discussions about a potential supply crunch, which could have far-reaching implications for the market.
Nansen further elaborated on the situation in a post on X (formerly Twitter), highlighting the dual outcomes dependent on market demand. “If an ETH ETF gets approved and there is demand, either in anticipation or after approval then this would be positive,” Nansen stated.
They suggested that the approval of an Ethereum ETF could significantly boost demand for the crypto, further constraining supply and potentially driving up prices. The above-mentioned trend was noted when the ETH price soared past $3,700 amid the ETF hype. On the contrary, Nansen noted that if there is a lack of demand for ETH, the current staking levels might not have a substantial impact.
ETH Price Trend
The Ethereum price has seen a slight decline and struggled to sustain above $3,700. At press time, the ETH price declined 2.19% to $3,705.54 on Wednesday, May 22. Whilst, the second largest crypto displayed a market capitalization of $446.16 billion.
Furthermore, the 24-hour trade volume for ETH slumped 42.02% to $27.51 billion. However, the ETH price outlook by analysts and major industry participants has been bullish. Standard Chartered analyst Geoff Kendrick reiterated the bank’s target of $8,000 for ETH by the end of this year.
Moreover, they also believe that the approval of Ethereum ETFs is imminent. In addition, the SEC has approached the ETF applicants, urging them to file amended 19b-4 filings. Additionally, the agency is expected to leverage the dynamics of ETH and staked ETH to ‘bypass’ the question of Ethereum’s status. Hence, Fidelity and Grayscale removed the staking feature of overnight.
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