- Given the current scenario, ETH would continue to outperform ETH on exchanges by stake.
- Deployed ETH accounted for 20% of the total circulating supply.
Users have shown increased interest in Ethereum [ETH] strike since the Shapella Upgrade went live on the mainnet in April.
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Staking, which was originally thought to be a risky proposition due to the ambiguity of the withdrawal, was given a boost after ETH was allowed to be unlocked. After successfully testing the withdrawal mechanism initially, users came back to withdraw their ETH.
Since Shapella, the ETH supply is up 26%.
The positive sentiment was confirmed by data from the blockchain analytics company Nansen. The company took to Twitter to reveal that its deployed ETH supply in June exceeded the liquid supply of ETH on exchanges, with a forecast that this trend is likely to continue for the foreseeable future.
Source: Nansen
Stakeout>> Trade
There has been a surge in ETH stakes, with deposits consistently outpacing withdrawals over the past three months. At the time of publication, the total locked amount was equivalent to 20% of the total circulating supply of ETH, according to a Nansen dashboard.
Source: Nansen
On the other hand, there has been a 31% drop in ETH balances on exchanges since November 2022. As shown in the chart below, the decline has accelerated since the introduction of Shapella. At the time of writing, there are approximately 22.8 million ETH available for trading on exchanges, representing 19% of all tokens in circulation.
The trend indicated that more and more people were taking ETH out of the market and using it as an investment to earn returns. And while strike rewards have gradually declined over the past two years, calls for strikes have increased.
Source: Nansen
Most strikers were in losses
Another possible reason behind the persistence in striking could be that several strikers were under water with their investments. According to data retrieved from a Dune dashboard, about 60% of strikers lost money since locking their ETH to the network.
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Most of this strike occurred at the $1,600 and $3,500 price levels, during the peak of the 2021 bull run. However, at the time of publication, the market price of ETH was $1,886.48, according to CoinMarketCap.
The underperforming market encouraged strikers, especially the experienced ones, to continue seeking rewards in staking, rather than loosening and selling their positions at a loss in the market.