- Over 30% of Ethereum’s circulating supply is now staked, with $72 billion locked and another $8 billion queued in the validator line
- Price has fallen 60% from its August peak as some major holders sell, while others such as Bitmine and Goldman Sachs maintain large exposure
Ethereum investors are facing a mixed landscape as the network reaches a major staking milestone amid a deep market downturn. New data from ValidatorQueue shows that more than 30% of Ethereum’s circulating supply is now locked in staking, signaling strong long-term conviction even as prices fall sharply. The combination of rising illiquid supply, modest yields, and renewed institutional positioning is shaping a complex backdrop for the second-largest blockchain network by market value.
Staking milestone reshapes supply for Ethereum investors
ValidatorQueue data indicates that over 30% of Ethereum currently in circulation has been staked, meaning nearly one in three tokens is locked and earning protocol rewards. This staked portion is generating just under 3% yield, which is relatively low compared with many other crypto assets but still represents a substantial commitment of capital. In dollar terms, the total staked Ether now amounts to a $72 billion position tied directly to the network’s proof-of-stake security model.
In addition to the tokens already locked, ethereum investors have lined up another $8 billion worth of Ether in the validator queue, a record level of pending deposits. This shows that interest in securing validator slots remains strong despite the recent price slide. Staking, which requires locking coins for an extended period, effectively removes this supply from active trading and can influence liquidity conditions in the wider market.
Bitmine has emerged as a particularly aggressive participant in this trend. On Wednesday, the firm added another $282 million of Ether to its staked holdings. That move lifted its total staked position to $6 billion, equal to 69% of its overall Ethereum reserves. The scale of this allocation underscores how some large holders view staking as a core element of their strategy, even at a time when short-term price performance is weak and yields are comparatively modest.
Price collapse tests confidence in Ethereum
The surge in staking activity comes as Ethereum’s market price experiences a steep decline alongside a wider crypto sell-off. At around $2,000 at the time of reporting, the token is down 60% from its August peak. The current level also sits well below the heights reached during the 2021 bull market, highlighting how far sentiment has dropped from previous cycles. This slump is unfolding even though broader macroeconomic conditions have been advantageous for risk assets, pushing stocks and gold to new historic highs.
The downturn is not limited to Ethereum. The broader crypto market has shed $2 trillion in value, representing a 46% contraction in total capitalization since October. Against that backdrop, the resilience of staking inflows appears notable, as ethereum investors continue to immobilize large portions of supply instead of moving to cash. Still, the lower price environment is exerting pressure on participants who entered the market during earlier rallies.
Selling by some of the network’s most visible figures has added another layer to the negative mood. In February, several prominent Ethereum backers became seven-digit sellers, including co-founder Vitalik Buterin and Stani Kulechov, the founder of decentralized finance platform Aave. Their transactions have drawn attention because they occurred during an already fragile phase for the market, reinforcing concerns about insider sentiment and liquidity.
Buterin has explained that the Ethereum Foundation is preparing for “a period of mild austerity” over the next five years. According to his comments, the recent token disposals are meant to finance new initiatives rather than signal a loss of faith in the protocol itself. Even so, the optics of major stakeholders selling into weakness remain a point of discussion among market participants, especially those focused on the long-term health of the ecosystem.
Contrasting strategies among major Ethereum investors
While some leading figures are trimming their holdings, others are reinforcing their exposure to the asset. Bitmine’s decision to stake 69% of its Ethereum reserves illustrates one approach: prioritizing network participation and yield over liquidity. By increasing its locked position to $6 billion, the firm has aligned itself with a thesis that emphasizes the long-term value of Ethereum’s proof-of-stake design, even as spot prices slide and returns from staking remain below much of the crypto industry.
Bitmine Chair Tom Lee has articulated a strongly optimistic view of the token’s price trajectory. He anticipates what he calls a “V-shaped recovery,” in which Ethereum rapidly rebounds to prior highs following the current drawdown. Lee pointed out that this kind of correction has occurred repeatedly in recent years, noting that since 2018, Ethereum prices have fallen 50% or more from a recent high on eight separate occasions. From his perspective, such declines have effectively become an annual feature of the asset’s trading history rather than a structural break.
Lee has maintained a long-standing bullish stance and has projected that Ethereum could eventually reach a price of $250,000. For ethereum investors weighing these forecasts against current market conditions, the contrast is stark: the token is far below previous peaks, yet some high-profile backers see the present period as another cyclical downswing rather than the start of a prolonged collapse. Whether that optimism proves justified will depend on factors ranging from network usage to regulatory developments, none of which are detailed in the available data.
Institutional activity is also playing a role in shaping the ownership profile of Ethereum. Goldman Sachs disclosed more than $1 billion in Ethereum-related exposure in its fourth-quarter filing with the U.S. Securities and Exchange Commission. The investment bank holds this exposure through direct equity stakes in exchange-traded funds rather than directly on-chain. Even so, the size of the position confirms that large financial institutions remain involved with the asset class during a period of heightened volatility and declining prices.
For individual ethereum investors, the divergence between insider selling, corporate staking, and institutional fund exposure creates a complex picture. Some major holders are increasing their locked positions, possibly signaling confidence in long-term network security and value accrual. Others are selling sizable amounts to raise cash for projects or to adjust risk. Meanwhile, large banks are maintaining billion-dollar stakes via regulated instruments. Together, these moves highlight that there is no single consensus on the asset’s near-term direction, even if many participants continue to treat it as a significant strategic allocation.
Conclusion
Ethereum’s latest staking milestone, with over 30% of circulating supply now locked and earning under 3% yield, underscores a strong base of long-term commitment despite sharp price declines. A total of $72 billion in staked Ether, plus a record $8 billion in the validator queue, shows that many holders are prepared to limit liquidity in order to participate in the network’s proof-of-stake model. At the same time, a 60% drop from the August peak, heavy selling by high-profile backers in February, and a broader $2 trillion market drawdown are testing confidence.
Large players are responding in different ways. Bitmine has concentrated 69% of its Ethereum holdings into staking, while its chair Tom Lee continues to forecast a strong rebound and a much higher long-term price. Goldman Sachs’ more than $1 billion in Ethereum exposure via exchange-traded fund equity adds another institutional layer to the picture. For ethereum investors, these developments together define a market where capital remains committed to the network, yet opinions on value and timing diverge sharply in the face of ongoing volatility.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
Featured image created by AI
