ValidatorQueue data shows that Ethereum has crossed a new milestone, with more than 30% of the circulating token supply now pledged.
This means that nearly a third of Ethereum is now illiquid, with a yield of just under 3% – not a high yield by cryptocurrency industry standards.
However, the staked ether represents a $72 billion bet on the long-term future of the blockchain network. Investors are lining up in validator queues to buy $8 billion worth of tokens, a record high.
Bitmine added an additional $282 million worth of tokens on Wednesday, bringing its locked tokens to $6 billion, accounting for 69% of its total Ethereum holdings.
Even as the token’s price plummeted, there was a vote of confidence in Ethereum’s proof-of-stake mechanism. The plunge coincides with a broader downturn in the cryptocurrency industry, which has lost $2 trillion, or 46% of the total market value, since October.
As of the time of the report, Ethereum was trading around $2,000, currently down 60% from its August peak and well below levels seen during the 2021 bull run.
This is despite favorable macroeconomic conditions that have pushed other asset classes like stocks and gold to all-time highs.
To add insult to injury, prominent backers of the second-largest blockchain network sold tokens en masse in February. The seven digital sellers include Ethereum co-founder Vitalik Buterin and decentralized finance platform Aave founder Stani Kulechov.
Buterin said the Ethereum Foundation will “enter a period of mild contraction” over the next five years and that he sold the token to fund new initiatives.
Despite this, many people are still doubling down on their purchases of Ethereum.
Bitmine chairman Tom Lee predicts a “V-shaped recovery”, where prices will quickly return to their peak after a sharp decline.
“Cryptocurrency prices are highly volatile, and the fact that this is the eighth time since 2018 that Ethereum prices have fallen by 50% or more from recent highs means that such declines occur every year,” he said.
Lee, who has long been one of the most prominent Ethereum bulls, predicted a price of $250,000 for the token.
Goldman Sachs is also a large holder of Ethereum. On Tuesday, the investment bank disclosed more than $1 billion in direct equity exposure through exchange-traded funds in a fourth-quarter filing with the U.S. Securities and Exchange Commission.
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Bitcoin has gained 0.6% in the past 24 hours and is trading at $67,350.
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Ethereum has gained 1.4% in the past 24 hours to $1,977.
Lance Datskoluo is DL News’ European market reporter. Any tips? Send him an email at lance@dlnews.com.