Ethereum’s supply is experiencing a significant contraction due to increasing institutional interest and a substantial portion of the supply being locked in staking. This reduction in the “liquid float” of ETH results from major financial institutions incorporating Ethereum-based exchange-traded funds (ETFs) into their portfolios, boosting ETH accumulation. Additionally, over 30% of Ethereum’s supply is locked in staking as part of its proof-of-stake mechanism, which not only enhances network security but also contributes to the shrinking circulating supply amid growing global demand for the network.
Ethereum faces supply compression amid rising ETF and staking activity
