Ethereum is experiencing the largest validator exodus in crypto history, with over 1 million Ether tokens currently queued for withdrawal from staking via Ethereum’s proof-of-stake (PoS) network.
The exit queue for Ethereum surpassed 1 million Ether (ETH) valued at $4.96 billion on Thursday. This figure represents the Ether set to be withdrawn by the network’s validators, who play a crucial role in adding new blocks and verifying transactions.
This mass exit has prolonged the validator exit waiting time to a record 18 days and 16 hours, according to blockchain data from validatorqueue.com.
While this doesn’t imply that all validators intend to sell their holdings, a substantial portion of the nearly $5 billion may be liquidated to secure profits, with Ether having surged 72% in the last three months.
“The exit queue hitting 1 million ETH showcases healthy market dynamics rather than a cause for concern,” said Marcin Kazmierczak, co-founder of RedStone blockchain oracle firm, in an interview with Cointelegraph, adding:
“It’s essential to recognize 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 indicates that the validator sales are being “easily absorbed by this institutional interest,” he noted.
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Ether continues to be the “liquidity magnet” of the crypto market: Analyst
Ether retains its status as the “liquidity magnet” of the crypto industry, with Ether futures open interest approaching $33 billion, reflecting strong institutional interest, according to Iliya Kalchev, a dispatch analyst at the digital asset platform Nexo.
“Standard Chartered reiterated that ETH and ETH-linked treasury firms remain undervalued, even at these levels, projecting a year-end target of $7,500,” the analyst stated, adding:
“Combined with Polymarket odds now pricing a 26% chance of ETH hitting $5,000 this month, Ethereum’s role as the market’s liquidity magnet is undeniable.”
The analyst noted that Ether “seems poised to challenge $5,000,” mentioning that investor demand may be influenced by the release of the US initial jobless claims report on Thursday, along with Friday’s release of the Personal Consumption Expenditure Price Index (PCE), which is the Federal Reserve’s preferred measure of inflation.
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In contrast to the 1 million Ether set to leave the network, only 737,000 Ether are currently awaiting staking in the entry queue, with an average wait time of 12 days and 19 hours.
Nevertheless, the network remains robust, hosting over 1 million active validators and 35.6 million Ether, which represents over 29.4% of the total supply.
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