Ethereum Staking Trend: A Decrease in Enthusiasm
The Ethereum (ETH) network has recently witnessed a noticeable decline in the percentage of its supply being staked, now holding at 27.6%. This figure marks a retreat to levels last seen in July 2024, stirring up discussions about the long-term allure of Ethereum for investors and whether staking is still a favored route for earning returns.
Staked Ethereum Percentage Declines from November Peak
According to data from Dune Analytics, the staking percentage on the Ethereum network has dropped from a peak of 29% in November 2024. Currently, approximately 33.5 million ETH is staked on the network, indicating a significant shift in investor behavior.
Staking began with the introduction of the Beacon Chain in December 2020, allowing users to earn rewards while helping secure the network. In the years following, Ethereum staking has gained momentum, bolstered by major crypto exchanges like Binance and Kraken, which provide staking services to their users.
An emerging facet of the staking ecosystem is liquid staking derivatives (LSDs), which allow investors to maintain liquidity while staking. Dominated by Lido (LDO), with a commanding 69% market share, LSDs have transformed the staking landscape. Binance Staking holds about 15% of the LSD market, indicating a competitive environment for users looking to stake ETH seamlessly.
However, the fallout from Donald Trump’s victory in the November 2024 US presidential election has altered the regulatory landscape significantly. This shift has led to an environment ripe for new staking protocols, which could intensify competition within the LSD sector. As new entrants emerge, concerns are mounting about the high concentration of the LSD market under Lido’s control. A single protocol holding substantial market power can threaten Ethereum’s foundational ethos of decentralization.
Is ETH Losing Its Charm Among Investors?
Despite its position as the second-largest digital asset, with a market capitalization exceeding $327 billion, Ethereum appears to be losing its luster among large investors. It seems they are increasingly looking for better returns in alternative blockchain ecosystems.
For example, data from DeFiLlama highlights a surge in the total value locked (TVL) within Solana’s (SOL) decentralized finance ecosystem, which skyrocketed from around $4.5 billion in September 2024 to an impressive $11.3 billion by January 2025. This rapid growth coincided with the memecoin frenzy that swept through Solana throughout 2024, drawing interest away from Ethereum.
Moreover, the decline in Ethereum-related search interest is evident. Google Trends data reveals a stark drop in interest, plummeting from 87 in November 2024 to just 41 recently. This trend indicates that ETH may be losing traction, particularly when juxtaposed against competitors like Solana (SOL), SUI, and XRP, which have exhibited more volatile price movements over the past year.
Source: Google Trends
Ethereum Whales and Market Sentiment
Recent on-chain data signals that Ethereum may be falling out of favor with crypto ‘whales.’ With ETH trading at $2,712—up 2.8% in the past 24 hours—there’s a growing sentiment among large holders about seeking opportunities elsewhere. Such movement among whales can significantly influence market trends and investor confidence.
ETH trades at $2,699 on the daily chart | Source: ETHUSDT on TradingView.com
As the landscape of staking and investment interest continues to evolve, the dynamics surrounding Ethereum raise substantial questions about its future viability and appeal. Investors and stakeholders alike are left to ponder the implications of this decline and what it means for the next chapter in Ethereum’s journey.
