Ethereum Staking Profitability Sinks to New Lows; 80% in the Red

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Ethereum staking has remained popular despite the crypto bear market. However, with ETH prices falling, fewer stakers remain in the money.

According to data shared on Jan. 4, Ethereum stakers are mostly in the red. Only those that staked ETH at prices lower than current levels are still in the money.

According to the Dune Analytics data, this equates to just 20% of all the ETH that is staked. Additionally, the $600 price level was when the largest chunk of Ethereum was staked. This was back in December 2020 when the Beacon Chain was launched.

Ethereum was actually trading near $600 on launch day, 50% less than its current price. Around 80% of the ETH has been staked at prices equal to or higher than $1,200.

Ethereum Staking Long-Term

However, the narrative remains positive, as most early stakers knew this would likely be a long-term investment. Furthermore, staking directly or via exchanges would involve a lockup period of around two years.

The Dune data reports that there is 15.9 million ETH currently staked, representing 13.2% of the entire supply. The staked stash is worth $20 billion at current prices.

The amount of ETH staked per week has fallen sharply since mid-November and is currently around its lowest level. Dune reports that around 25,000 ETH was staked over the past week. Before the FTX collapse, weekly figures were upwards of 150,000 ETH being staked.

Ethereum developers have slated the Shanghai upgrade for March. This will introduce Ethereum Improvement Proposal (EIP) 4895, which allows staked ETH to be withdrawn.

Unless Ethereum prices surge by then, it is unlikely that there will be a mass exodus from staking contracts. Those in it for the long haul are unlikely to sell their ETH at a loss, especially while it is still earning more ETH.  

Another Dune dashboard was posted, showing real-time flows to ETH stakers. “PoS Ethereum is the most economically sound it’s ever been. Holders aren’t being diluted. Stakers are turning a profit,” said Blockworks researcher Dan Smith.

ETH Price Outlook

ETH prices have gained a little this week but are still range-bound. The asset is up 2.9% on the day, trading at $1,251 at press time. Most of those gains have materialized in the last couple of hours during Wednesday morning Asian trading.

ETH prices have now reached their highest levels since mid-December. However, it’s still down 74.4% from its November 2021 all-time high.

ETH Price Chart by BeInCrypto


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