Long Dormant Ethereum Whale Suddenly Stakes 49K ETH – Here’s How Increased Staking Participation Can Boost ETH’s Price

A
long-dormant

Ether
whale
who
participated
in
the

Ethereum
Initial
Coin
Offering
(ICO)
might
be
about
to

stake
a
massive
32,015

ETH
tokens,
according
to
on-chain
analytics-focused
Twitter
account
@lookonchain.

The
ICO
participant
staked
48,992
ETH
back
in
October,
ending
six
years
of
dormancy
at
the
time.
According
to
@lookonchain,
the

whale
transferred
32,015
ETH
tokens
to
a
new
address
earlier
this
week,
which
they
think
the
whale
may
be
about
to
stake.

The
Ethereum
ICO
whale
received
120,000
ETH
tokens
at
the
genesis
of
the
Ethereum
mainnet
in
2015
across
three
separate
wallets.
If
they
do
stake
a
further
32,015
tokens,
that
means
the
whale
will
have
staked
67.5%
of
the
120,000
tokens
they
received
at
the
Ethereum
ICO.

More
ETH
Shifts
Towards
Staking

The
above-noted
whale’s
(possible)
shift
towards
staking
a
greater
portion
of
its
ETH
holdings
reflects
a
shift
in
the
ETH
market.
ETH
staking
first
became
possible
on
the

beacon
chain
back
in
late
2020.

But
up
until
now,
most
ETH
owners
have
opted
not
to
stake
their
tokens,
despite
attractive
yields
of
currently
around
7-8%
for
node
operators
and
4-5%
for
staking
pool
participants.

That’s
because,
at
the
moment,
staked
ETH
tokens
cannot
be
withdrawn.
According
to
Ethereum,
the
lack
of
flexibility
in
staked
ETH
withdrawals
was
to
protect
the
network’s
integrity
as
it
transitioned
from
proof-of-work
to
proof-of-stake.

But
that
transition
has
now
been
completed
(the
“Merge”
took
place
last
September).
And
Ethereum
developers
are
working
on
the
blockchain
ecosystem’s
next
big
upgrade,
the
so-called
“Shanghai”
hard
fork
that
is
currently
scheduled
to
take
place
before
the
end
of
March.

The
upcoming
upgrade
will
allow
staked
ETH
to
be
withdrawn
for
the
first
time.
While
withdrawals
won’t
be
immediate,
the
shift
towards
greater
withdrawal
flexibility
seems
to
be
attracting
more
ETH
owners
to
staking.

Since
September
2022,
when
the
merge
took
place,
the
number
of
staked
ETH
has
risen
by
about
2.7
million
ETH
to
16.2
million,
meaning
that
currently
around
13.5%
of
the
ETH
supply
is
locked
in
staking.
That’s
still
a
far
cry
from
staking
participation
on
Ethereum
rival
Cardano’s
blockchain,
which
has
a
participation
rate
of
over
70%,
thanks
for
its
flexible
withdrawals.
But
the
trend
seems
to
be
towards
rising
staking
participation.

How
Higher
Staking
Participation
Can
Boost
ETH’s
Price

Staking
itself
is
a
positive
for
ETH’s
price

why
own
a
cryptocurrency
that
offers
no
yield
whatsoever
when
you
could
own
a
cryptocurrency
that
offers
a
predictable
yield,
many
crypto
investors
may
ask.

But
up
until
now,
the
lack
of
flexibility
in
withdrawals
was
deterring
investors
who
value
liquidity
over
a
steady
yield.
Now
ETH
investors
can
have
(closer
to)
both.
As
ETH
staking
participation
rises,
that
should
boost
ETH
for
a
few
reasons.

First
of
all,
it
encourages
HODLing,
with
HODLers
guaranteed
to
get
at
least
a
5-8%
return
(depending
on
whether
they
are
a
node
operator
or
staking
pool
participant)
on
their
staked
ETH,
regardless
of
market
conditions.

Assuming
a
majority
of
those
attracted
into
staking
given
its
new
flexibility
do
end
up
HODLing
their
ETH
tokens,
this
also
results
in
a
reduction
of
the
generally
available
supply
of
ETH
tokens.
Ether
buyers
will
essentially
be
fielding
sell
offers
from
a
smaller
pool
of
willing
sellers.

Many
analysts
think
that
a
shift
to
increased
staking
participation
could
be
a
key
driver
of
long-term
appreciation
in
the
price
of
ETH.
As
crypto
matures
as
an
asset
class
and
price
fluctuations
tend
towards
that
which
is
normal
in
traditional
financial
markets,
many
expect
major
financial
institutions
to
become
increasingly
drawn
to
ETH
staking,
with
some
referring
to
ETH
as
the
bond
of
the
crypto
universe.

Other
drivers
of
long-term
ETH
appreciation
are
expected
to
be
factors
such
as
the
blockchain’s
continued
efforts
to
upgrade
(sharding
could
make
Ethereum
more
scalable
later
this
year),
its
continued
mainstream
adoption
(non-zero
balance
addresses
should
soon
hit
100
million)
and
the
fact
that
it
is
now
a
deflationary
asset.

Ethereum
Alternatives

If
you’re
looking
for
other
high-potential
crypto
projects
alongside
ETH,
we’ve
reviewed
the
top
15
cryptocurrencies
for
2023,
as
analyzed
by
the

CryptoNews
Industry
Talk
team.The
list
is
updated
weekly
with
new
altcoins
and
ICO
projects.

Disclaimer:
The
Industry
Talk
section
features
insights
by
crypto
industry
players
and
is
not
a
part
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editorial
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Cryptonews.com.