Ethereum tug-of-war

Author: Martin

With institutions pouring in, and early adopters profiting and exiting, the Ethereum network is engaged in a $5 billion staking tug-of-war.

The Ethereum PoS network is engaged in an epic "tug-of-war." The latest data shows that as of August 19, the number of ETH in the Ethereum PoS network's exit queue has soared to 910,461, worth approximately $3.91 billion, setting a record high in the history of the cryptocurrency. These ETH waiting to be exited will need to wait in line for approximately 15 days and 18 hours to complete the unstaking operation. Meanwhile, approximately 268,217 ETH (worth $1.14 billion) are waiting in line to join the Ethereum network. Activation is delayed by approximately four days and 15 hours, creating a massive gap of nearly 650,000 ETH between inflows and outflows. Market forces are engaged in a fierce battle within the Ethereum staking pool. This seemingly contradictory capital game reveals deep market disagreements regarding Ethereum's future. The Exit Wave: Who is leaving? And why? The surge in Ethereum's price has become a key factor instigating profit-taking. From a low of 1,386 in April 2025 to a high of 4,788, the price of ETH has skyrocketed by over 350%, reaching a record high near $4,868. Faced with such a surge, early stakers have chosen to unstake their holdings to lock in profits. On August 17, a whale user transferred 10,819 ETH (approximately $47.79 million) to the Kraken exchange in one go, including interest earned on 564 ETH staked, for an overall floating profit of over $20.68 million. Furthermore, the decoupling of the Liquidity Staking Token (LST) from the price of ETH exacerbated the crisis. In July, the discount between stETH and ETH reached 0.4%, creating an arbitrage opportunity. Some traders chose to buy staked tokens at low prices in the secondary market, then profit from the price difference by unstaking and redeeming them for full ETH. The EtherFi platform's liquidity strategy alone accumulated approximately 20,000 ETH withdrawal requests. Lido, EtherFi, and Coinbase led the unstaking wave, with 285,000, 134,000, and 113,000 ETH, respectively. Market entry: Why are institutions increasing their holdings against the trend? 1. Regulatory relaxation ignites institutional enthusiasm On May 29, 2025, the US SEC explicitly stated that "ETH staking does not violate securities laws," completely clearing the way for institutional participation. Since then, institutional staking commissions have skyrocketed by over 100%, and validator queue times have increased by 360%. Asset management giants such as BlackRock have even submitted applications to the SEC, planning to add a staking function to their spot ETH ETF, with an expected annualized return of 3%-5%.

2. The rise of the “ETH treasury” strategy of listed companies

• BitMine Immersion:Cumulative holdings exceed 1.5 million tokens, with a current market value of approximately US$6.53 billion. It is the world's largest enterprise-level Ethereum holder and is currently actively increasing its ETH holdings and staking, with the goal of increasing shareholder value through staking income;

• SharpLink Gaming:

Since its transition to an ETH asset strategy in May,

It holds a total of 728,800 ETH, with a current market value of approximately US$3.12 billion, making it one of the largest corporate holders of Ethereum; • The Ether Machine: It holds a total of 345,400 ETH, with a current market value of approximately US$1.48 billion. On the tenth anniversary of Ethereum, it increased its holdings by 15,000 ETH in a single transaction, highlighting its determination to make strategic investments. 3. ETF Funds Continue to Flow In: The US spot ETH ETF has continued to attract capital since its launch: • BlackRock iShares Ethereum Trust (ETHA), holdings: 3.6 million ETH, market capitalization: Approximately $15.66 billion (based on ETH's current price of approximately $4,350). Market Position: The world's largest Ethereum ETF, holding 60% of all Ethereum ETFs, with over $10 billion in assets under management (AUM), and a record single-day net inflow of $1.79 billion. • Grayscale Ethereum Trust, Holdings: 2 million ETH, Market Cap: Approximately $8.7 billion, Recent Updates: Net inflows of over $730 million over the past week, with cumulative inflows of $7.3 billion through 2025. Recently, expectations for its staking functionality have attracted increased institutional allocations. • Fidelity Ethereum Fund, Holdings: 793,600 ETH (approximately 15% of the total market share), Market Performance: A record single-day net inflow of $210 million, the second-highest net inflow in the third week of July 2025, pushing the total AUM of Ethereum ETFs over $20 billion. Institutional funds have become the ultimate arbiter of this tug-of-war. Over the past two weeks, institutional investors have increased their holdings by over 1.83 million ETH, fully covering the unstaking scale. The coexistence of exits and entries is a sign of the maturity of the Ethereum ecosystem—a dynamic balance between early investors cashing in on their gains and institutional funds making long-term allocations. This capital turnover is essentially a market vote on Ethereum's status as "financial infrastructure": When Wall Street is betting real money on the value of its settlement layer, short-term volatility will eventually give way to a new growth narrative.