Ethereum Poised To Hit 35% Surge In Staking Demand – What It Means For Investors

Christian Encila

2 years ago

3 mins read

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In 2022, Ethereum formally adopted Proof of Stake (PoS) as a more secure and energy-efficient method to validate transactions and add new blocks to the blockchain.

PoS and other consensus mechanisms are integral to the security of a network. This shift has significant implications for the Ethereum ecosystem, particularly in terms of staking – the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network.

While staking has been around for some time, several factors are now converging to potentially drive a significant increase in ETH staking. In fact, a leading staking service provider has predicted a surge in staking activity and has backed it up with compelling reasons.

So, what does this mean for Ethereum, and why is staking becoming such a critical part of its blockchain infrastructure?

Staked Q2 Report Predicts Significant ETH Staking Rate Increase

Staked, a research subsidiary of the Kraken exchange, has released its Q2 report, projecting that the ETH staking rate could see a significant increase of 20% to 35% over the next 12 to 18 months. This forecast was based on several factors, including the recent increase in average Ethereum staking yield from 5.2% to 5.8% on a year on year basis.

Moreover, the Staked Q2 report’s prediction of a significant increase in the ETH staking rate could also have broader implications for the cryptocurrency market as a whole. If more users begin staking their ETH, the circulating supply of the cryptocurrency will decrease, potentially leading to an increase in its price.

This, in turn, could have a ripple effect on the entire cryptocurrency market, making it a crucial trend to watch in the coming months.

ETH total market cap currently at $218 billion on the daily chart at TradingView.com

What Increased ETH Staking Means For Investors

One of the most obvious benefits is that a higher staking yield means investors can earn more rewards for their staked ETH. This could be especially appealing to long-term investors who are looking to maximize their returns.

Additionally, the increase in staking could potentially lead to a decrease in the circulating supply of ETH, which could drive up its price. This means that investors who are holding ETH could see their holdings increase in value.

But the impact of increased ETH staking goes beyond just earning rewards and potential price increases. It also has a positive effect on the overall health and stability of the Ethereum network.

By staking their ETH, investors are essentially locking it up, making it more difficult for bad actors to attack the network. This makes the network more secure and trustworthy, which could attract more users and investors to the platform.

Source: Coingecko

At the time of writing, the price of ETH stands at $1,798 according to CoinGecko, with a 2.4% rally in the past 24 hours. However, it’s worth noting that ETH has experienced a seven-day slump of 8.5%, highlighting the volatility that is characteristic of the cryptocurrency market.

-Featured image from Siam Blockchain

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.