Ethereum Staking Hits Record 36 Million ETH, Driving Structural Supply Shock

[Ben Graham]

Ethereum (ETH) staking levels continue to break records, with the latest snapshot of the blockchain showing nearly 36.1 million ETH staked on the network – the highest level in history.

Ethereum Staking Hits New ATH, Will Price Follow?

According to a CryptoQuant Quicktake post by contributor XWIN Research Japan, close to one-third of Ethereum’s circulating supply is now staked. This high proportion suggests that ETH may be on the verge of a structural supply shock.

The following chart shared by the analyst shows that even during sharp corrections in 2022 and 2023, staking levels continued to climb. Unlike speculative flows, which often exit the market during downturns, staking activity has proven “sticky” – with investors choosing to lock ETH into the network rather than liquidate.

Staking ETH carries several key implications. First, it compresses supply – as more ETH is staked, less liquid supply remains on exchanges, creating a natural “supply shock” that amplifies demand-driven price moves.

Similarly, it shows the priorities of investors. By staking ETH, investors essentially work as long-term participants. In this way, they align their incentives with network security and yield instead of short-term trading.

ETH’s recent rally to $4,500 also coincided with record staking levels, creating a feedback loop – higher prices attracted institutional inflows from custodians, exchange-traded funds (ETG), and whales, while reduced liquid supply added further upward pressure.

ETH’s Transition Into An Institutional Asset

ETH ETFs now hold more than $300 billion in reserves, while asset managers such as BlackRock are actively accumulating. This underscores Ethereum’s transition from a speculative asset to a yield-bearing, institutionally supported infrastructure layer.

U.S.-based spot ETH ETFs also enjoyed a long streak of positive inflows, lasting from the week ending May 16 through the week ending August 15. Commenting on this shift, XWIN Research Japan noted:

Ethereum’s all-time-high staking levels reveal its underlying strength: while Bitcoin faces selling dominance in taker metrics, ETH is experiencing structural supply reduction. This divergence highlights Ethereum’s growing role not just as a crypto asset, but as the backbone of tokenization, DeFi, and RWA adoption.

Similar sentiments were recently echoed by Tom Lee, the co-founder of Fundstrat Global Advisors. Lee noted that ETH is getting closer to becoming the backbone of global markets.

That said, some risks remain. For instance, ETH price is still lagging despite ATH in daily network transactions. At the time, the analyst said that ETH was likely still in the accumulation phase.

Similarly, the recent price pullback in ETH after creating a new ATH over $4,900 shows how recurring liquidation cycles are shaping ETH’s price action every week. At press time, ETH trades at $4,606, up 2.5% in the past 24 hours.