Almost 10% of total circulating supply is out of the market
Over 10 million ETH has already been withdrawn from the circulating market supply as the second-largest cryptocurrency’s staking feature becomes more popular every day, reports IntoTheBlock.
Eight figures of Ether are now deposited into the contract, which allows receiving stable income with a certain amount of Ether that gets locked for a minimum of a three-month period. As Coinbase previously reported to its users, after a full switch to a proof-of-stake network, the APY is going to increase from 5% to 12%.
In the last 90 days, the amount of ETH staked has increased by 20% and by 10% in the last 30 days alone. Increased risk tendencies also explained such a large increase in the volume of funds locked in the contract in the cryptocurrency market.
How does the market benefit from Ethereum staking?
The main advantage that the market receives from the feature, which is rapidly gaining popularity among investors, is the decreased selling pressure that comes from the removal of coins from circulation for at least three months.
With less funds circulating on exchanges, it becomes much easier for the market to drive up the price of an asset, even with less purchasing power.
Previously, the introduction of a burning mechanism for Ethereum affected its movement on the market after the coin rallied by more than 70%. After the update took place on the network, over 1 million ETH worth almost $3 billion have been burned already.
At press time, Ethereum is trading at $2,871 and gaining 12% over the past four days as the market sees some relief after Bitcoin hit $41,500 with help from retail investors.
