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Ethereum stakers head for the exit, causing $3.8bn logjam
If you’re looking to unstake your Ethereum, you’d better pack a lunch — and maybe a few spares. The validator exit queue has swelled to an all-time high of more than $3.8 billion worth of Ether, with average wait times now exceeding 15 days. That’s a major shift from the norm since Ethereum’s switch to proof-of-stake in 2022. Before mid-June, delays longer than 24 hours were rare and short-lived. Staking is the process of locking up ETH to help secure the network in return for yield, while unstaking is withdrawing those funds.
The exodus is being driven largely by liquid staking platforms. Over the past month, Lido, Ether.Fi, and Coinbase have seen a combined 573,000 Ether, worth around $2.5 billion, withdrawn, accounting for the lion’s share of recent exits. DeFi researcher Ignas partially attributes the mass unstaking to a broader unwinding of leveraged staking loops. It’s a once-popular strategy where users staked Ether for tokens like stETH, borrowed Ethereum on Aave using that token as collateral, and repeated the cycle to boost yield.
But when Aave’s borrow rates spiked to over 10% in late July following a $1.7 billion Ether withdrawal (largely attributed to Justin Sun), the math broke down. Loopers scrambled to unwind positions, triggering a cascade of unstaking activity from liquid staking providers who had backed those DeFi strategies. “Even if borrow rates stabilize,” Ignas warned, “loopers are worried that stETH or other LST depegs could cause position liquidations. Better to unwind now and stay safe.”
The wave of withdrawals may also be preparation for upcoming Ethereum staking ETFs. New SEC guidance in early August clarified that liquid staking tokens are not securities, potentially clearing the way for more institutional interest. Still, some early holders may simply be taking profits or reallocating after Ethereum’s rebound to a four-year high above $4,500 — up 180% from just four months ago.
Wood has a different theory
“Robinhood offering a 2% match for crypto transfers, and VCs and other investors shifting staked ETH into Treasury companies (DATs) to double their money when lockups expire.” She then added, “As with $MSTR $BMNR, Treasury stocks are a way wirehouse advisors can give clients exposure to BTC and ETH.”
Wood’s statement comes just days after Ark Invest sold over 30,000 shares of Coinbase worth approximately $12 million, along with more than 11,000 shares of Robinhood, valued at around $1.1 million. The firm also sold shares of Jack Dorsey’s Block and its own Bitcoin ETF, ARKB. But what stood out most was Ark’s fresh $116 million allocation into BitMine Immersion Technologies — an Ethereum-focused treasury company backed by Peter Thiel.
Understanding the “2% match”
Robinhood launched a crypto deposit match program, offering users a 1% bonus on net crypto transfers. If community deposits exceed $500 million, the match increases to 2%. The offer was valid until July 7, subject to terms and conditions. At the same time, treasury companies like BitMine — which specialize in holding large amounts of ETH — are becoming increasingly popular with VCs and institutional investors. These firms operate similarly to how MicroStrategy stock has become a proxy for Bitcoin exposure. With Ethereum's rising relevance in DeFi, many view these treasury stocks as a bridge between crypto infrastructure and traditional equity markets.
Ethereum as a corporate treasury asset
According to a Yahoo Finance report, BitMine now holds more than $1 billion in ETH, making it one of the largest public holders of Ethereum. The firm’s strategy mirrors the original Bitcoin-treasury play pioneered by companies like MicroStrategy. ETH has climbed over 50% in the past month, and although it remains below its 2021 all-time high of $4,600.
This article has been published in thestreet.com via Yahoo News.
Ethereum stakers head for the exit, causing $3.8bn logjam
Ethereum validator exit queue hits $3.8 billion. Unstakers now need to wait over 15 days to exit. Loop unwinds and profit-taking are driving withdrawals.
finance.yahoo.com
