Ethereum

Ethereum’s Staking Weekly Net Inflows Increased Sharply, What’s Behind The Surge?

Published

4 weeks ago

November 25, 2024

Interest in Ethereum, the second-largest cryptocurrency asset, is gaining momentum once again among retail and institutional investors, as evidenced by a robust increase in its net staking inflows in the past week in tandem with recent improvements in the price of ETH.

Consistent Growth In Ethereum’s Staking Net Inflows

In a positive development, Ethereum’s staking has attracted significant capital over the past week, leading to a surge in its net weekly inflows. Maartuun, a market watcher and analyst at leading on-chain data and analytics platform CryptoQuant, reported the development, reflecting growing commitment.

The spike in staking activity indicates that many investors are interested in supporting Ethereum’s proof-of-stake (PoS) ecosystem while receiving passive returns. It also bolsters ETH’s robust security and position in the cryptocurrency landscape.

Data shared by the analyst shows that Ethereum staking saw a net influx of +10,000 ETH over the past week, with 115,000 ETH being deposited and 105,000 ETH being withdrawn. This shows that deposits have surpassed withdrawals once again after months of net outflows, marking a significant change. With the total staked ETH rising again, it indicates renewed confidence and optimism in staking as a long-term strategy, which could be crucial in strengthening ETH’s ecosystem.

Addressing the components behind the surge, Maartuun has pointed out a mix of possible factors. These include rising ETH prices, improved staking infrastructure like liquid staking options, and institutional players entering the market.

Furthermore, the expert highlighted that this surge in net inflows might be a reaction from long-term investors to Ethereum’s stability after the merger and their increasing trust in the ecosystem.

In the event that the current rate of deposits keeps up, Maartuun is confident that the development could limit the availability of ETH in the market, which might affect price movements. “Overall, this recent inflow is a positive sign for Ethereum’s ecosystem and long-term growth,” he added.

ETH’s Open Interest Reaches New Milestone

Ethereum has been seeing major advancements lately in several key metrics, such as its Open Interest (OI). ETH’s open interest experienced a notable uptick in the past few days, surging to a new all-time high.

A report from CryptoQuant reveals that ETH’s open interest is valued at over $13 billion, representing an increase of more than 14% in the past four months. Additionally, funding rates demonstrate a positive trend, signaling that long-position traders dominate the market. This spike shows that interest in ETH’s derivative markets is rising sharply and growing market sentiment that supports price increases in the short term.

CryptoQuant also revealed that Ethereum’s estimated leverage ratio has hit a new all-time high, reaching +0.40 for the first time in history. This metric, which is determined by dividing the open interest by the exchange’s coin reserves, suggests a huge rise in leverage positions, indicating increased risk-taking by traders in derivatives trading.