Ethereum (ETH) Market Insights
The Ethereum (ETH) market is evolving rapidly with the potential introduction of an Ether exchange-traded fund (ETF) in the U.S. As this development unfolds, the amount of staked Ether is approaching a record high, which is helping to stabilize the circulating volume despite the overall growth in ETH supply.
According to Julio Moreno, head of research at CryptoQuant, the total number of staked ETH is nearing its all-time high, currently standing at 33.3 million ETH, which represents about 27.7% of the total supply. This trend indicates a growing interest in staking as a means to secure the network and potentially earn rewards.
While the total supply of ETH is increasing again, signaling its return to being an inflationary asset, there are mechanisms like staking and burning that can help mitigate this effect. Staking involves locking up ETH for a specified period, while burning entails permanently removing a portion of transaction fees from circulation.
Moreno also highlighted that recent spot trading volume data suggests Ether is becoming as liquid as Bitcoin, with ETH spot trading volume reaching 80%-90% of that of Bitcoin. Additionally, data from CoinMetrics reveals that approximately 12% of Ether’s supply is utilized in smart contracts and bridges, with around 40% of the cryptocurrency currently being locked and not actively traded.
Path to the ETH ETF
The competition to launch an Ether ETF is intensifying, with market participants anticipating trading to commence before July 26. Recent announcements by Invesco and Galaxy regarding a 0.25% management fee for their proposed spot Ether ETFs have added to the market excitement, slightly exceeding VanEck’s fee proposal of 0.20%.
However, before ETF trading can commence, regulatory approval from the SEC is required, along with final submissions of amended forms containing fee structures and other pertinent details from the ETF issuers. The market sentiment, as reflected by betting platforms like Kalshi, is optimistic about Ether’s performance relative to Bitcoin, with a 65% chance of outperformance but a 95% certainty that Ether won’t reach an all-time high before Bitcoin.