The amount of Ethereum (ETH) staked on the Beacon Chain has reached its highest-ever levels, but some observers are growing concerned over a large sell-off after the Merge.
The amount of ETH staked in the Beacon Chain smart contract has reached 12.76 million according to Glassnode. It reported that 398,000 unique validators have staked and an additional 19,800 staked and came online in May.
Glassnode also claims that the amount of staked ETH is 10.73% of the circulating supply. At current prices, the value of those locked up assets is around $23.3 billion.
Other sources vary slightly with the Ethereum Launchpad dashboard reporting 13.36 million ETH staked, which works out at 11% of the total supply.
Either way, the increase in staking and validating is a vote of confidence for the Ethereum ecosystem in a bear market that is mired in negative sentiment and FUD (fear, uncertainty, and doubt) at the moment.
The Merge effect
The highly anticipated Ethereum Merge is set to take place in Aug, however it has some industry onlookers concerned. The Merge will end proof-of-work mining and transition the network to proof-of-stake reducing its energy consumption by more than 99%.
Many in the crypto community seem to think that all of this staked ETH will be sold to markets once the Merge takes place. This is unlikely to occur for a couple of reasons. Firstly, the staked assets will not be immediately released when the Merge takes place as it is needed to secure the network and guarantee consensus. Secondly, the ETH will be released in tranches and not all at once so it will trickle back into markets rather than flood them.
From a price perspective, fundamentals are not usually factored in during bear market conditions so it is unlikely that ETH prices will surge when the Merge takes place. Some industry experts are of the opinion that the Merge will be bullish for Ethereum prices, but only time will tell.
Gamers will also have reason to celebrate as the demand for high-end graphics cards will dwindle as it already is doing which should bring down prices.
ETH price outlook
Ethereum is currently trading at $1,826. The bears have full control, however, as the asset has lost 10% over the past two weeks and 34% over the past month. It is currently down almost 63% from its Nov all-time high.
The previous bear market saw a correction of 94% for ETH as it plunged to $85 in Dec 2018 so there could be a lot more pain ahead for the world’s second-largest crypto asset.
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.