More Ethereum is being locked up than ever and that is good news

Ethereum (ETH) set a new record this week, but not on the price boards. It’s about staking: a record number of coins are now being staked to maintain the network. Nearly one in three Ether is now locked, which removes a significant amount of supply from the market.

36 million ETH staked

Data from Validator Queue shows that more than 36 million ETH is now being staked on the Ethereum network. That’s almost 30 percent of the total circulating supply, worth a combined value of more than $118 billion. The previous record was 29.54 percent and was set last summer.

The more Ether is staked, the more expensive and difficult it becomes to attack the network. And it simply means that there is less Ether available to sell.

Of course, it does not immediately cause the Ethereum price to rise, but according to the classic game of supply and demand, it does work in favor.

In addition to the 36 million ETH staked, there is also another 2.3 million ETH in the queue to participate. At the same time, the exit queue, where stakers retrieve their ETH, is almost empty for the first time since last summer.

Ethereum now has approximately 900,000 active validators. Lido Finance is by far the largest player and controls around 24 percent of all staked ETH.

Settings open the tap

Growth increasingly comes from institutional parties. A notable name is BitMine Immersion, the largest listed Ethereum holder. The company now owns 4.17 million ETH, accounting for more than 3.4 percent of the total supply. More than 1.25 million ETH of this has been staked.

Stock exchange funds also play a larger role. Grayscale recently started paying out staking rewards to investors in its Ethereum ETFs. And Morgan Stanley, one of the largest banks in the world, recently filed for a staking Ethereum fund.

That ability to generate passive income is a key difference from Bitcoin (BTC). That network is secured by miners and requires specialized, expensive equipment.