ETH in staking explodes, reaches almost 3 million and breaks record in May By CriptoFácil

2023-06-02 21:10:10

© Reuters ETH Staking Explodes, Hits Nearly 3 Million, Breaks Record in May

CriptoFácil – Ether () closed the month of May at a slight increase of 0.16%, but the total amount of ETH left in staking grew substantially. According to data from TradingPedia, cryptocurrency users left no less than 2.96 million ETH validating the blocks.

This amount represents about 2.5% of the total supply of ETH and, based on the current value of the cryptocurrency (BRL 9,480), corresponds to just over BRL 28 million. Furthermore, the total represents a 300% growth from the nearly 700,000 ETH left staking last month.

In fact, the increase in May is equivalent to more than the total recorded in the previous four months. The table shows that the cumulative total of ETH staking stood at 2.84 million, against 2.96 million in May alone.

Shanghai effect

Apparently, the growth is part of the effect caused by the Shanghai update, which was released in April. After the update took place, users were able to withdraw their ETH from the staking protocols, including the principal amount.

But not only did investors not withdraw most of the ETH, they also deposited even more cryptocurrency. In that sense, the effect of the update seems to have been to give ETH holders more confidence to stake their cryptocurrencies.

By leaving them locked, users become network validators and earn rewards for their help. This reward consists of ETH paid as if it were interest on an investment.

“ETH has once again proven to be an investor favorite and the opportunities Shanghai provides for liquidity is just another pillar. The US debt ceiling saga and previous events with bank failures have certainly taken a toll on Ether’s popularity and more and more users prefer to stake their money on ETH rather than keep it in the bank,” said Brian McColl, analyst at TradingPedia.

Trust in ETH

The 2.96 million blocked in May represents around 2.46% of the total ETH supply (120.25 million according to CoinGecko data). This is another sign that proves that investors trust ETH and consider it an investment tool and not a speculative asset.

In addition, the current interest rate is approximately 5.4%, which offers better deposit terms than most banks around the world.

Ultimately, the recent events with the possible default of the US economy and the growing interest of investors in betting on Ether raises the question whether cryptocurrencies are not permanently losing their speculative character and becoming a very stable financial instrument. Shanghai Upgrade definitely seems like a step in that direction.

By CriptoFacil