Ethereum is experiencing the largest validator exodus in crypto history, with over 1 million Ether tokens currently waiting to be withdrawn from staking via Ethereum’s proof-of-stake (PoS) network.
On Thursday, Ethereum’s exit queue exceeded 1 million Ether (ETH), valued at $4.96 billion. This represents the amount of Ether set for withdrawal by the network’s validators, who are essential for adding new blocks and verifying transactions, playing a crucial role in the blockchain’s operation.
This mass exodus has extended the validator exit waiting period to a record 18 days and 16 hours, according to blockchain data from validatorqueue.com.
Although this doesn’t indicate that all validators aim to sell their holdings, a significant portion of the nearly $5 billion might be liquidated to realize profits, especially since Ether has surged 72% over the past three months.
“The exit queue crossing 1 million ETH shows healthy market dynamics rather than being a reason for concern,” Marcin Kazmierczak, co-founder of RedStone blockchain oracle firm, told Cointelegraph, adding:
“What’s essential to grasp is that these exits are minor compared to the institutional capital pouring into Ethereum.”
The “unprecedented demand” from public entities like treasury firms and exchange-traded funds means that the validator sales are “easily absorbed by this institutional appetite,” he noted.
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Ether remains the “liquidity magnet” of the crypto market: Analyst
Ether continues to be regarded as the “liquidity magnet” of the crypto sector, with Ether futures open interest approaching $33 billion, indicating robust institutional interest, according to Iliya Kalchev, dispatch analyst at digital asset platform Nexo.
“Standard Chartered reaffirmed that ETH and ETH-treasury firms remain undervalued even at these prices, forecasting a year-end target of $7,500,” said the analyst, adding:
“Combined with Polymarket odds now reflecting a 26% chance of ETH hitting $5,000 this month, Ethereum’s status as the market’s liquidity magnet is undeniable.”
Ether “appears ready to test $5,000,” the analyst stated, noting that investor sentiment may be influenced by Thursday’s release of the US initial jobless claims report and Friday’s release of the Personal Consumption Expenditure Price Index (PCE), the Federal Reserve’s favored inflation measure.
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In contrast to the 1 million Ether poised to exit the network, only 737,000 Ether are queued for staking in the entry queue, with an average wait time of 12 days and 19 hours.
Nevertheless, the network remains stable with over 1 million active validators and 35.6 million Ether, making up more than 29.4% of the total supply.
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