Binance calculates the possible percentage of profitable ETH in staking
Early adopters who bought ETH at $400 to $700 in December 2020 are the most profitable
16.02.2023 - 15:20
406
2 min
0
Analysis by Binance Research has found that a notable minority of ether holders who staked their ETH in Ethereum's Beacon Chain over the past three years are making money, while the rest are underwater.
Ethereum staking involves users locking their ETH tokens to validate transactions in return for a reward paid out in ether. Staking, therefore, is referred to as passive investing – putting coins lying dormant in self-custody or in an exchange wallet to use. Currently, onchain annualized staking yields are around 4%.
More than 16.5 million ether, worth $27.7 billion, has been staked since Beacon Chain went live in December 2020, of which 31% or 5.115 million ETH are in profit while the rest, 11.385 million ETH, are in loss, according to Binance Research.
The loss here means ether's current going market rate is less than the rate prevalent when they were locked in the Beacon chain.
The analysis comes at a time the market is trying to gauge potential selling pressure following Ethereum's Shanghai upgrade, scheduled for mid-March. The highly anticipated upgrade is set to open withdrawals of staked ETH.
Per Binance Research, those underwater have little incentive to liquidate their holdings after the Shanghai upgrade. Meanwhile, those in profit are likely to keep holding.
"We note a sizeable amount of ETH (around 2M) was staked at prices in the US$400 - 700 range – this represents the earliest stakers in Dec 2020 – a group that is likely illiquid given that liquid staking was far less known at the time," Binance Research noted in the report published early Thursday.
"While this is a considerable chunk of staked ETH and is currently at profit, given these were the earliest stakers in the market, we can imagine these are some of the strongest Ethereum believers," Binance Research said.
Note that the whole staking balance cannot be withdrawn on the day of the upgrade. Besides, only 43,200 ETH can be unstaked per day. However, the total staking reward earned, which comes to around 1 million ETH, can be withdrawn instantly, according to Saxo Bank.
This material is taken from the website coindesk.com.
Useful material?
Telegram 
Twitter Market
The company’s unrealized profits from investing in its first cryptocurrency approached $14 billion
Nov 19, 2024
Incidents
The search, the reason for which was not announced, took place a week after the election, the results of which Polymarket users predicted quite accurately
Nov 14, 2024
Market
Analysts point to the growing popularity of the first cryptocurrency as a safe haven asset
Nov 13, 2024
Market
The product will begin trading on the Swiss Exchange on November 19
Nov 12, 2024
Market
The company’s unrealized profits from investing in the first cryptocurrency approached $13 billion
Nov 12, 2024
Market
The company predicts that the rate of the first cryptocurrency will grow to $200 000 by the end of next year
Nov 11, 2024
Cryptocurrency rates
-
Bitcoin
$98 950
BTC
+1.64%
-
Ethereum
$3 392.29
ETH
+8.8%
-
BNB Smart Chain
$579.4
BSC
+1.23%
-
Ripple
$1.4
XRP
+25.74%
-
Dogecoin
$0.39611
DOGE
+2.94%
-
Cardano
$0.883656
ADA
+12.23%
-
Bitcoin Cash
$497.4
BCH
-3.35%
-
Polkadot
$6.23
DOT
+9.5%
-
Stellar XLM
$0.283834
XLM
+19.7%
-
Litecoin
$91.02
LTC
+4.8%