A long-dormant Ether the pope who participated in it Ethereum Initial Coin Offering (ICO) perhaps going stake that is a massive 32,015 ETH token, according to the on-chain analytics-focused Twitter account @lookonchain.
ICO participants staked 48,992 ETH back in October, ending six years of dormancy at the time. According to @lookonchain, the pope transferred 32,015 ETH tokens to a new address earlier this week, which they think the whale can stock.
The Whale Ethereum ICO received 120,000 ETH tokens at the genesis of the Ethereum mainnet in 2015 in three separate wallets. If he has 32,015 more tokens, it means that the whale will give away 67.5% of the 120,000 tokens received in the Ethereum ICO.
More ETH Shifts to Staking
The aforementioned shift of whales (probably) towards staking a larger portion of their ETH holdings indicates a shift in the ETH market. ETH staking is the first to work on flare chain back in late 2020.
But until now, most owners of ETH have chosen not to stake tokens, despite the current attractive yield of around 7-8% for node operators and 4-5% for staking pool participants.
That’s because, at this point, staked ETH tokens cannot be withdrawn. According to Ethereum, the lack of flexibility in the withdrawal of staked ETH is to protect the integrity of the network during the transition from proof-of-work to proof-of-stake.
But that transition is now complete (“Join” happened last September). And Ethereum developers are working on the next big upgrade of the blockchain ecosystem, the so-called “Shanghai” hard fork which is currently scheduled before the end of March.
A future upgrade will allow staked ETH to be withdrawn for the first time. While withdrawals are not immediate, the shift to greater withdrawal flexibility seems likely to attract more ETH owners to staking.
Since September 2022, when the merger occurred, the amount of ETH purchased has increased by about 2.7 million ETH to 16.2 million, which means that now about 13.5% of the ETH supply is locked in staking. It is still far from the participation of staking in the rival Ethereum Cardano’s blockchain, which has a participation rate of more than 70%, thanks to the flexible withdrawal. But the trend seems to be towards rising staking participation.
How More Staking Participation Can Increase ETH Price
Staking itself is positive for the price of ETH – why have a cryptocurrency that does not offer any results when you can have a cryptocurrency that offers predictable results, many crypto investors may ask.
But until now, the lack of flexibility in withdrawals has hindered investors who value liquidity with a fixed yield. Now ETH investors can have (close to) both. As ETH staking participation increases, that should increase ETH for several reasons.
First, it encourages HODLing, with HODLers guaranteed to get at least a 5-8% return (depending on the node operator or staking pool participant) on their purchased ETH, regardless of market conditions.
Assuming the majority of those attracted to staking because of the new flexibility will stop HODLing ETH tokens, this also results in a decrease in the supply of ETH tokens generally available. Buyers of ether will always offer to sell from a smaller group of sellers.
Many analysts think that the shift to increased staking participation could be a key driver of long-term appreciation in ETH price. As crypto matures as an asset class and price fluctuations tend toward normal in traditional financial markets, many expect major financial institutions to become increasingly interested in staking ETH, with some citing ETH as the bond of the crypto world.
Other drivers of long-term ETH appreciation are expected to be factors such as blockchain’s continuous efforts to upgrade (sharding could make Ethereum more scalable by the end of this year), continuous mainstream adoption (non-zero balance addresses should soon reach 100 million ) and is in fact now a deflationary asset.
Alternative to Ethereum
If you’re looking for other high-potential crypto projects alongside ETH, we’ve reviewed the top 15 cryptocurrencies for 2023, as analyzed by CryptoNews Industry Discussion 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 part of Cryptonews.com’s editorial content.
