Ethereum Brace for Spot ETF Rise as 40% of Supply Locked
Around 40% of Ethereum supply is locked as the market anticipates final approval for an ETH spot-based exchange-traded fund (ETF).
According to Dune Analytics data, a breakdown of this “locked supply” shows that there are over 33 million ETH staked on the network, or roughly 28% of Ethereum’s total supply.
Proof-of-stake networks like Ethereum require users to “lock” digital assets to support security and operations, and are rewarded for doing so.
Additionally, 12% of the supply is locked in smart contracts and bridges, which have seen strong adoption recently. For example, AJ Warner, Chief Strategy Officer at Offchain Labs, noted that ETH in Arbitrum One bridges has grown steadily over the past three years.
Market observers believe that this significant ETH lock-up and the imminent ETF approval will drive up the ETH price. Tom Dunleavy, managing partner at MV Capital, noted that the approval of a spot Ether ETF would have a significant impact on the market. He said:
“Spot ETH ETF flows will move this market rapidly.”
ETF Approval
Meanwhile, anticipation continues to grow surrounding the final approval of a spot Ethereum ETF in the United States.
On July 9, Bitwise’s chief commercial officer, Catherine Dowling, noted that the ETF is close to approval, with the Securities and Exchange Commission (SEC) just addressing a few remaining issues.
Dowling suggested the products could be approved in the summer, a sentiment echoed by Bloomberg ETF analyst James Seifart.
Seifert speculated that approval could come by the end of the month, although he was less confident in predicting an exact launch date. He said:
“I have pretty low confidence in that launch date prediction at this point. There is no deadline and the SEC’s Corp Fin is stalling here (and I don’t blame them). But the changes have been very minimal (I don’t know) and I don’t see why an ETF wouldn’t be ready to launch in a few weeks.”
Meanwhile, crypto bettors on Polymarket expect the product to launch before the end of this month, with an 87% chance of it being listed on exchanges by July 26.
