The Beacon Chain has recorded a significant milestone, with the total amount of staked Ether reaching 30,206,801 ETH, equivalent to over $85 billion. This represents nearly a quarter of the total circulating supply of Ether. Currently, there are 943,974 active validators on the Beacon Chain.
February has proven to be a positive month for the Ethereum network. In the first half of the month, investors deposited 600,000 ETH into Ethereum 2.0 staking contracts. Additionally, the price of ETH surged to yearly highs, surpassing $2,800. At the time of writing, Ether is trading at $2,774.
This substantial amount of ETH locked in proof-of-stake (PoS) contracts is seen as a bullish indicator for the Ethereum network. It enhances the network’s security and efficiency while reducing the available supply of ETH for trading on exchanges. As a result, this leads to a decrease in supply amid an increasing demand.
The Beacon Chain introduced PoS to the Ethereum ecosystem when it merged with the original Ethereum proof-of-work (PoW) chain in September 2022. This integration allowed validators to stake ETH. Currently, ETH stakers receive an annualized rewards rate of 4%.
The Ethereum PoS network operates through a group of validators, who are required to stake 32 ETH. Initially starting with 21,063 validators, the Beacon Chain now boasts over 900,000 validators.
Critics had anticipated a high demand for withdrawals by validators after the Shanghai upgrade in April 2023. However, within a week of the upgrade, the amount of newly staked ETH surpassed withdrawals. This suggests that validators were choosing to restake their ETH in order to benefit from passive income.
The price of ETH has experienced a rally in recent weeks, achieving double-digit gains and approaching the $3,000 mark. With the approval of spot Bitcoin exchange-traded funds in the United States, attention is now shifting to spot Ether ETFs and whether they will also receive approval from the U.S. Securities and Exchange Commission. The introduction of spot Ether ETFs could have a significant impact on the second-largest cryptocurrency, as institutional demand for ETH combines with a declining market supply.