ETH Staking Approaches ATH as Ethereum ETF Approval Date Nears

Traders on Polymarket are confident with a 90% probability that the Ethereum ETF spot will be approved in the US before July 26.

ETH Staking Approaches ATH as Ethereum ETF Approval Date Nears

As the official approval date for the Ethereum spot ETF approaches, the amount of Ether (ETH) being staked is nearing an all-time high.

According to data from CryptoQuant, the total amount of Ether staked is showing a significant increase and is currently nearing record levels, reaching 33.3 million ETH - equivalent to over $103 million USD at the time of writing, accounting for more than 27.7% of the total supply.

Alongside this, the number of validators tracked on Dune Analytics has also surpassed 1 million, marking continuous new highs since the Shanghai upgrade went live in April 2023.

With the substantial increase in ETH staking, inadvertently, it has become an effective solution to stabilize the circulating supply of Ether amid this network's vast smart contract capabilities, following the Dencun upgrade-induced inflation.

Researchers at CryptoQuant suggest that "the ETH supply is increasing again, albeit slowly. The total supply is currently at its highest since December 11, 2023. This signifies the end of Ethereum's Ultrasound money narrative."

"Ultrasound money" is a term implying an asset with stable purchasing power and increasing value over time. While a fixed supply asset like gold or Bitcoin is considered "sound money," ultrasound money refers to assets with a decreasing supply (deflation), such as Ethereum.

Correlation between total supply and gas fees burned on the Ethereum network from September 2022 to July 2024. Source: CryptoQuant

Meanwhile, data from CoinMetrics shows that approximately 12% of Ether's supply is currently in use within smart contracts or bridge connections between blockchains. Between this figure and the tokens being staked, about 40% of this ETH is "locked" and not actively traded.

As reported by Coin68, in mid-May, the SEC unexpectedly preliminarily approved 8 proposals for Ethereum spot ETFs, despite maintaining silence and hinting at potential securities investigations into ETH.

Recently, the competition among Wall Street giants to launch Ethereum spot ETFs has heated up, with Bitwise being the latest to update its S-1 filing, following VanEck, 21Shares, BlackRock, Fidelity, Franklin Templeton, and Grayscale. All await a nod from the SEC.

Bloomberg analyst Eric Balchunas previously predicted in late June that the SEC might approve an Ethereum ETF early this month, a scenario that did not materialize.

Nevertheless, Bloomberg analysts maintain the market is likely to see the introduction of an Ethereum ETF in July.

On the Polymarket market, the majority of participants are also betting with an 89% likelihood that the Ethereum spot ETF will commence trading before July 26 this year.