• Ethereum’s blockchain upgrade enabled the unstaking of ETH tokens from the Beacon chain.
• The number of staked ETH tokens has been rapidly increasing, reaching a new all-time high last week.
• The rising staking participation could provide an ongoing tailwind to the ETH price by creating scarcity and potentially boosting its value.

Rising Staking Participation on Ethereum

The recent successful implementation of Ethereum’s blockchain upgrade allowing for the unstaking of ETH tokens from the Beacon chain has caused a surge in staked ETH tokens, reaching a new all-time high last week. This increase in staked ETH tokens is surprising some traders and analysts who had expected withdrawals to occur instead.

Lower Risk for Investors

The newfound flexibility in staking lowers the risk to investors of putting their tokens into the staking contract, resulting in substantial inflows of ETH into said contract expected in the years ahead. This influx of long-term investment could act as a deflationary tailwind for Ether (ETH) due to its reducing available supply, potentially leading to an increase in value.

Market Reaction

The market reacted positively to this news with a surge in Ether (ETH) prices jumping from below $2000 and now consolidating around $2100. This demonstrates that more investors are waiting on sidelines before depositing their ETH into the staking contract than those eager to withdraw their tokens and sell them down.

Deflationary Tailwinds?

As more people stake their Ether (ETH), it decreases its readily available supply, creating scarcity which could lead to a higher price as investors become more bullish about its future potential and value over time. If this proves correct then this would be considered a deflationary tailwind for Ether (ETH).


The rapid rise in total number of staked ETH tokens since late February is extremely encouraging news for Ethereum supporters and may lead to increased value for Ether (ETH) over time due to deflationary tailwinds created by decreased availability.