Bitmine locks 77% of Ethereum holdings – Why $9B ETH bet matters

Bitmine Immersion Technologies has advanced its Ethereum staking plan with 77.2% of its overall ETH holdings now locked for yield. 

According to on-chain data, the firm staked another 106,200 ETH ($244 million) on Wednesday, the 29th of April. Now the world’s largest treasury firm has staked 3.92 million ETH (worth $8.97 billion) 

Worth pointing out that the firm crossed the 5 million ETH milestone last week. Interestingly, it bought an extra 45K ETH (worth $103 million), which will likely be staked too. 

Bitmine’s aggressive ETH staking bet

Overall, Bitmine has accumulated over 5 million ETH in a record 10 months and is close to hitting its goal of 6 million ETH. And the entire holdings will be staked through its MAVAN validator system and other staking platforms. 

At the current annualized yield of 3%, Bitmine had projected that staking its entire stash would generate $363 million annually.

According to its Monday statement, the 73% of its staked ETH (3.7 million out of 5.08 million ETH as of last week) was generating an annual yield of $264 million. 

According to Tom Lee, Bitmine Chairman, ETH has been the best-performing asset since the West Asia crisis started, besides crude oil prices. He added, 

That said, there has been an uptick in broader institutional staking demand recently. As tracked by the validator queue, the amount of ETH waiting to be staked has surged to 3.2 million ETH, up from 2.6 million ETH a week ago. That’s a 23% increase in staking demand. 

Will staking surge boost ETH price?

Intriguingly, there has been a close correlation between staking demand and ETH’s price performance. Notably, there was a surge in staking demand, tracked by validator-queued ETH, last July and August. 

During the period, ETH also rallied from $2.3K to over $4K, underscoring positive staking spikes with ETH uptrends (white shaded areas). 

Likewise, a decrease in staking demand also weighed on Ethereum [ETH] Spot prices as investors offload unstaked ETH to the market. 

If the staking demand trend persists, then ETH bulls may eye the $2.6 target, especially if $2.2K is defended as support. 

In fact, according to Coinbase analysts, the ETH market was in a great setup. Speculators (short-term holders dropped 38% in Q1) were flushed out while long-term holders increased exposure. 

Final Summary

• Bitmine has staked $9 billion in ETH, or 77% of its over 5 million ETH holdings. 
• The rising staking demand could form a bullish set-up for the altcoin in case of a positive catalyst.