The Ethereum price has again fallen below the $4,500 mark. That happened despite asset manager Grayscale tying up more than 300,000 Ethereum in staking contracts. At current rates, this amounts to more than $1.3 billion. So there is confidence in the Ethereum price, but the market seems to have doubts.
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Ethereum ETF met staking
On October 6, Grayscale announced that its Ethereum Trust ETF and Solana Trust will now also offer staking. This allows institutional investors to participate in earning returns by locking up coins through regular investment accounts.
For the crypto industry, this is seen as a big step towards wider adoption, similar to the introduction of the first Bitcoin ETFs earlier this year.
Yet the price of Ethereum fell immediately after the news. While the coin briefly rose above $4,700, the price is now below $4,500 again. According to analysts, this is because other factors outweigh the positive effect of Grayscale.
Many investors want to escape from Ethereum staking contracts
Data from the blockchain shows that there is currently a large difference between the number of coins that investors want to lock in and the number of coins that investors want to release.
About 489,000 Ethereum is queued to be staked, much of it coming from Grayscale. On the other hand, there are more than 2.4 million Ethereum that investors want to release. That indicates significant selling pressure, which overshadows the optimism surrounding Grayscale.
In addition, so-called whales, large holders of Ethereum, have started moving again in recent weeks. For example, an investor who had been inactive for four years sold 1,800 Ethereum, good for a profit of more than $8 million.
Another whale even moved 15,000 Ethereum, worth almost $70 million, to trading platform Bitfinex. Such moves are often taken as a signal that big investors are taking profits, making the market extra nervous.
According to experts, this may be a pattern that is also visible in Bitcoin. Earlier this month, analysts also saw that old wallets were becoming active again. This points to a broader trend in which long-term investors are seizing the opportunity to sell after the sharp price rises of the past year.
Danger to Ethereum?
While pinning coins like Ethereum helps secure the network and reduce coin availability, large outflows can have the opposite effect. If more investors exit than enter, the supply on the market increases and the price comes under pressure.
For Grayscale, the introduction of staking within its ETFs is an important strategic move. It makes institutional participation easier and can ultimately contribute to a more stable demand for Ethereum. Analysts emphasize that the effect of this will probably only become visible in the longer term.
For now, however, the market continues to pay close attention to the balance between stakes and exits, and the movements of large holders. These factors will determine in the coming weeks whether Ethereum can recover above $4,500, or whether selling pressure increases even further.
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Source: https://newsbit.nl/ethereum-zakt-onder-4-500-ondanks-miljardensteun-van-grayscale/
