The amount of Ethereum staked on the Beacon Chain has reached another milestone despite asset prices tumbling today.
There is now more than 12 million ETH staked on the Beacon Chain according to the Ethereum Launchpad dashboard. Additionally, CoinMarketCap is currently reporting a circulating supply of a little over 120 million ETH, which means that 10% of all the Ethereum out there has been staked.
The actual figure reported is 12,341,535 ETH at the time of press, which is worth an estimated $34 billion at current prices.
The staking reward is around 4.4% annual percentage yield. While this is a lot less than the double-digit returns early Ethereum stakers enjoyed, it is way more than any high street bank is offering at the moment on inflationary fiat accounts.
Staked Ethereum liquidation concerns
There are concerns that ‘the Merge’ will result in an exodus from staking as Ethereum gets freed up for withdrawals. This could result in a sizeable chunk of it being sold to market if stakers need to liquidate the asset, adding downward pressure to ETH prices.
When staking began with the Phase 0 Beacon Chain launch in early December 2020, ETH was priced at just $600. Even with the current market slump, the asset has still gained 357% since then.
However, ardent aficionados of the ecosystem along with venture capital companies are very unlikely to unstake their ETH and sell it. Additionally, back in February, Ethhub founder Anthony Sassano said:
“Withdrawals won’t be enabled until at least 6 months after The Merge and then I believe the maximum is around 30k a day.”
The Merge will also usher in proof-of-stake consensus which spells an end to Ethereum mining. This is bullish for two reasons, firstly the asset will become more environmentally sustainable having dropped its energy usage by more than 99%. Companies and lawmakers will view Ethereum in a better light as a result.
Secondly, the issuance may become deflationary as more ETH is being burnt by the upgrade introduced with EIP-1559 than is being generated.
According to the Ultrasound.Money tracker, 2.27 million ETH has been burned so far, worth an estimated $6.25 billion. The tracker is predicting that the Ethereum supply will shrink by 2.1% per year at current burn rates after the Merge later this year.
ETH price free-fall
Unfortunately for investors, none of these bullish metrics have made a difference to price action this week. ETH has dumped 6.6% on the day in a fall to $2,747 at the time of writing according to CoinGecko.
The asset has lost nearly 20% over the past month and is heading toward the support levels it found in January and March at around $2,500.