Ethereum Staking Surpasses 25%: Shapella Upgrade Spurs Surge in Long-Term Holders

• Approximately a quarter of ETH’s circulating supply is now locked into the network after a major boost with the launch of Shapella Upgrade last year.
• This development points to a more decentralized and secure Ethereum network, further painting a bullish long-term outlook for ETH holders.

Since the launch of Shapella Upgrade last year, Ethereum staking has witnessed a remarkable uptick. This has culminated in Ethereum’s staking participation rate crossing 25%. This means that around a quarter of ETH’s circulating supply is locked into the network.

This is a remarkable achievement, unmatched by any other crypto project. It further confirms the network as the most decentralized and secure network with investors showing their confidence based on their billions worth of tokens staked. Noteworthy, by staking their ETH, these investors are able to make passive income. For some investors, this has turned out to be a more stable way to turn a profit by earning more ETH which can be sold further into the future.

Beginning April 2023 the staked supply has more than doubled, sitting at 38.7 million as of the 12th of February. This was largely boosted by the clarification on token withdrawal which was a key concern prior.

Data from validatorqueue.com reveals a significant surge in Ethereum validator entries on February 12th. This jump marks the highest influx of aspiring validators in the past four months, potentially indicating renewed enthusiasm for staking on the Ethereum network.

The uptick in staking has coincided with a price surge for the network’s native token ETH. At the time of writing, ETH is up by nearly 4%, extending its weekly loss by more than 13%. ETH is at the time of writing trading at $2,736.

Unsurprising, ETH is cementing its position as the second-largest cryptocurrency and by far the largest altcoin. ETH enjoys a market cap of over $328 billion, nearly three times larger than 3rd placed Tether (USDT) with a market cap of nearly $100 billion. However, ETH remains a long way to reaching BTC’s market cap which stands at over $1 trillion at the time of writing.

In the past, there has been speculation that Ethereum could potentially overtake Bitcoin based on its network developments. A leaked report from Goldman Sachs revealed that the bank believes that Ethereum will dominate the crypto market with researchers noting that Ethereum will be far more superior to Bitcoin because of its ecosystem.

In the coming months, investors are looking at three critical events. First is the Dencun upgrade is expected to happen on the Ethereum mainnet on March 13. The Dencun upgrade will enhance Ethereum’s scalability through five EIPs with the most important being the EIP-4844 also called the proto-danksharding.

Second, the possible approval of the already filed for spot Ethereum exchange-traded funds (ETFs) with the United States Securities and Exchange Commission (SEC). Ethereum ETFs are predicted to get a green light in May. Additionally, the general market bullishness fueled by the upcoming Bitcoin halving should resonate with the rest of the market and drive prices of the entire crypto market higher.