BitMine locks up $1B in Ether as big corporates stake ETH for yield

Corporations are increasingly turning to Ethereum staking to earn passive yield, a shift that is tightening the amount of Ether available for sale on the open market.

BitMine Immersion Technologies, the largest corporate Ether (ETH) holder, staked 342,560 ETH worth over $1 billion in the two days leading up to Sunday, according to blockchain data platform Lookonchain.

Staking involves locking ETH into Ethereums proof-of-stake network to secure the blockchain in exchange for a passive annual percentage yield (APY) of about 3%–5%.

BitMines $1 billion in staked Ether also significantly impacted the Ethereum validator queue, with the entry queue having expanded to almost double the size of the exit queue for the first time in over six months, Cointelegraph reported earlier on Monday.

Source: Lookonchain

The validator entry queue stands at 12 days and 20 hours, with 739,824 ETH awaiting staking, while the exit queue stood at 6 days and two hours, with 349,867 ETH awaiting withdrawal, according to validatorqueue.

The queue shows that nearly twice as many entities are looking to stake ETH for passive income compared to the validators waiting to withdraw their stakes, signaling more long-term confidence in Ether.

Ethereum validator queue, entry, exit, all-time chart. Source: validatorqueue.com

When the exit queue is larger, it signals that validators are looking to withdraw their Ether, potentially positioning to sell their holdings.

Corporate treasuries hunt Ether yield

Most leading corporate Ether holders are staking a large portion of their ETH for passive income, including SharpLink Gaming, Bit Digital and The Ether Machine, among others.

SharpLink Gaming, the second-largest Ether holder, said it staked “nearly all” of its Ether holdings and generated a total of 9,701 Ether worth $29 million in staking rewards, according to the companys dashboard.

The Ether Machine, the third-largest holder with $1.49 billion in Ether, has “fully staked” its treasury onchain, and managed to consistently rank among the top 5% validators for staking reward efficiency, the company announced in October.

The growing amount of staked ETH is effectively reducing the sellable Ether supply, seen as a net positive for the long-term value accrual of the second-largest cryptocurrency.

Total ETH holdings and ETH staking rewards. Source: Sharplink.com

Despite the increasing amount of staked ETH, the industry‘s most successful traders by returns, who are tracked as “smart money” traders on Nansen’s blockchain intelligence platform, continue reducing their spot Ether holdings.

ETH/USD, one-day chart, Token God Mode. Source: Nansen.ai

Smart money traders sold a cumulative $4.26 million worth of spot Ether tokens across 53 wallets during the past week, but whale wallets bought a cumulative $11.6 million during the same period, according to Nansen.

Public figures have also bought nearly $6 million worth of spot Ether, while fresh wallets bought over $517,000 during the past week, signaling Ether demand from crypto investors with newly created wallets.