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digital
daily

digital daily: Not all about price

Not all about price: Market price is the ultimate arbiter. It’s where supply and demand meet, kiss, and run. Higher prices bring seller sorrow and lower prices buyer blues. But there are plenty of market participants who are less sensitive to market gyrations, even in crypto. It’s emphatic in the duration of ether holdings. In periods of rising speculation, asset turnover typically rises, shortening the duration of holdings. We don’t see any of that today. Instead, a record 57% of ETH has been held for longer than a year, up sharply from the fast-twitch pace of 30% in mid-2021. It coincides with a rise in ETH dominance. Ethereum’s share of the crypto asset ecosystem is 20.4%, near cycle highs. Staking flows are a more surprising a-cyclical force. On April 12, Ethereum’s Shapella upgrade allowed investors to withdraw staked ether assets for the first time. ETH prices have declined slightly since then. Yet, Ethereum staking demand is robust. Newly staked ether has increased 25%, totaling 4.5 million since Shapella. The percentage of ether staked is now a record 19% of the total supply. And the pipeline is strong, too. There were 612,248 active validators on June 12, and it’ll take more than 47 days to empty the queue of new staking validators waiting. In contrast, the exit line for withdrawals is less than 2 days. The outcome is the mirror opposite of the risks contemplated going into the Shapella upgrade, and it’s obviously not demand chasing higher prices. The Ethereum community is voting with its feet – its shoe size is on the rise. 

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