Ethereum Staking and ETF Developments

Ethereum (ETH) Staking and ETF Developments

As anticipation grows around the potential launch of an Ethereum (ETH) exchange-traded fund (ETF) in the U.S., the amount of ETH staked is approaching a record high. This high level of staked ETH, currently standing at 33.3 million ETH or 27.7% of the total supply, is helping to keep the circulating volume in check.

The increase in the total supply of ETH signals a return to being an inflationary asset, potentially impacting its role as a long-term store of value. However, strategies like staking and burning transaction fees can help address this challenge. Despite the slow growth in total supply, the narrative of ultra-sound money for ETH has shifted since December 11, 2023.

Data suggests that Ethereum’s spot trading volume is comparable to that of Bitcoin (BTC), with ETH spot trading volume reaching 80%-90% of Bitcoin’s volume in recent weeks. Additionally, around 12% of ETH’s supply is currently utilized in smart contracts and blockchain bridges, while the combination of staked tokens and those in use amounts to approximately 40% of the total ETH supply, effectively “locking” these tokens from active trading.

Progress Towards an ETH ETF

The race to introduce an Ethereum exchange-traded fund (ETF) is gaining momentum, with indications that trading of such ETFs may commence before July 26, according to predictions on Polymarket.

Recent announcements from Invesco and Galaxy revealed a proposed 0.25% management fee for their spot ether ETFs, slightly higher than the 0.20% proposed by VanEck. However, the launch of these ETFs is contingent upon receiving feedback from the U.S. Securities and Exchange Commission (SEC) on the pending applications and finalizing amended forms with fee details and other necessary information.

Market sentiments on Kalshi indicate a 65% likelihood of Ethereum outperforming Bitcoin, while 95% of bettors are confident that Ethereum will not reach a new all-time high before Bitcoin does.

This HTML-formatted content provides a detailed overview of the Ethereum (ETH) staking landscape, recent developments in the race for an ETH ETF, and market sentiments regarding Ethereum’s performance relative to Bitcoin.