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Ethereum (ETH) Staking Surges $1.8 Billion as DeFi Investors Anticipate ETF Inflows

By:
Ibrahim Ajibade
Updated: Jun 13, 2024, 11:37 GMT+00:00

Key Points:

  • Ethereum price reached an Q2 2024 peak of $3,974 on May 27 after the US SEC approved spot ETH ETFs.
  • ETH 2.0 Staking contracts have received over 500,000 ETH deposits, since the official SEC approval verdict
  • Over 10,000 new validators have joined the ETH 2.0 Beacon Chain staking network, easing centralization concerns.
Ethereum (ETH) price forecast

Ethereum price reached an Q2 2024 peak of $3,974 on May 27 after the US SEC approved spot ETH ETFs, however recent staking trends show that investors are anticipation more bullish action within the broader DeFi markets. 

Ethereum attracts $1.8 Billion Staking Deposits after ETF Approval

Since the approval of Ethereum ETFs, ETH price action has been choppy, thanks to uncertain macro economic landscape. But looking under the hood, there has been a positive shift in ETH 2.0 Beacon Chain staking activities.

Specifically, staking deposits have grown by 500,000 ETH, rising from 32.41 million to 32.91 million ETH between May 21 and June 12 2024.  This represents a percentage growth of approximately 1.54% in less than two-weeks. 

Ethereum (ETH 2.0) Staking Deposit Trends Since ETH ETF Approval | June 2024 | Source: TheBlock
Ethereum (ETH 2.0) Staking Deposit Trends Since ETH ETF Approval | June 2024 | Source: TheBlock

In tandem with the increase in staking deposits, the number of validators has also seen growth. The count has increased by 10,000, from 1.02 million to 1.03 million validators, marking a growth rate of about 0.98%.

At the time of writing on June 12, the total ETH 2.0 deposits stands at 32.91 million valued at around $117 billion.

These figures indicate a increased interest in Ethereum’s staking ecosystem and improved decentralization, since the ETF approval. More so, it indicates a more sophisticated security architecture for the second-largest blockchain network in the world.

The modest yet significant growth in both staking deposits and validator numbers highlights the community’s confidence in Ethereum’s long-term potential and the positive impact of ETF approval. 

However, other critical market indicators, and industry experts anticipating that the positive impact of Ethereum ETF inflows will not be limited to the ETH markets alone. 

DeFi Market Surged $20 Billion as Investor Optimism Grows

The anticipated ETF inflows will not only impact Ethereum price, but also accelerate the growth, adoption and liquidity available to DeFi protocols built within the ecosystem. Ferrum Labs CTO, Taha Abbasi, alluded to this during a recent interview.

“The increase in Ethereum staking and validator activity can be seen as a precursor to wider adoption of multi-chain interoperable solutions like Ferrum Network.

Ferrum Labs CTO, Taha Abbasi,

TradingView’s TOTALDEFI chart tracks the market valuation of all crypto assets with the DeFi sector. Recent trends show how investors have reacted to the ETF approval verdict.

Crypto TOTALDEFI Market Cap | TradingView
Crypto TOTALDEFI Market Cap | TradingView

The DeFi markets experienced a rapid growth spurt when Bloomberg analysts first broke the news of the imminent SEC approval verdict on May 20.

The chart above shows how the TOTALDEFI market cap surged by $20.8 billion, between May 21 and May 27 before the market correction phase triggered a 16% downsizing as the ETF issuers experience delays to the official market launch of the ETH derivatives.

This provides an early glimpse into how investors are positioned for a trickle-down effect of the ETH ETF inflows.

As Ethereum strengthens its position, the demand for DeFi protocols and networks that enable seamless interaction across different blockchains will likely grow.

Ferrum’s focus on optimizing decentralized applications (DApps) andinteroperable solutions for DeFi positions it well to capture value in this emerging market, Taha Abbasi concluded.

Notably, Bitcoin ETF launched in January 2024 have pulled in over $58 billion worth of BTC holdings within the first 6-months of trading. If Ethereum ETFs attracts half of that traction, as estimated by analyst, investors can anticipated over $20 billion capital inflows into the ETH markets in the coming months.

In summary, the post-ETF approval surge in Ethereum staking deposits and validators is a positive signal for the broader blockchain ecosystem. It not only underscores Ethereum’s growing acceptance but also the potential to unlock new frontiers for DeFi protocols. 

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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