$800 million worth of Ethereum is going to be locked in the next few weeks
Ethereum’s staking feature has reached another milestone which shows that most of the cryptocurrency community is interested in the new feature that the second largest cryptocurrency will bring to the table, like Status of balance validators and turnout suggest.
According to the metric, the number of coins in the staking queues now equals 302,000 ETH, or $800 million. The staking queue is the lineup of wallets suitable for the staking feature, which are waiting for activation. Such a rapid increase in the volume of funds in the queue has never taken place on the market before.
How does Ethereum staking affect the market?
First and foremost, Ethereum staking locks in a certain amount of Ether for at least three months. With more funds locked in contracts, less selling pressure will hit the cryptocurrency market. Besides decreasing the coin’s issuance, even the short-term coin lockdown will help Ethereum become deflationary.
But while the first months or even years of Ethereum staking will play in favor of the currency and its ecosystem, the 12% APY rewards will create pressure on the market; when most funds get unlocked and in case of an unpleasant market performance, investors will decide to take profits to cover their losses.
Ethereum’s performance in the market
After four months of trading after hitting the all-time high, Ethereum has lost over 40% of its value, creating enormous pressure on investors who have chosen to stake rather than hold or trade the second-largest cryptocurrency.
Prior to the Merge, Ethereum’s staking APY stays at approximately 5% and barely covers any losses from the devaluation of the asset. At press time, Ether trades at $2,757 and has lost 0.6% of its value in the last 24 hours.
