Ethereum Staking Queue Misleading as Institutional Demand Remains Strong
Sygnum Bank's Thomas Brunner says Ethereum's 43-day staking queue is not a straightforward bullish signal. The queue has swelled to roughly 2.5 million ETH, with new stakers waiting approximately 43 days to activate while the exit queue remained largely empty.
The backlog reflects protocol mechanics as well as institutional demand, Brunner said. 'Almost no one is un-staking, which points to genuine conviction,' he noted. However, a meaningful share of this staking backlog stems from last year's Pectra upgrade, which lowered the daily validator entry rate.
Institutional conviction remains strong despite softer ETH prices. Ether was trading at above $1,800 on Friday, down 1.7% on the day. Long-term holders have little reason not to stake as it will protect against protocol inflation and provide a good yield through transaction fees and MEV.
Brunner identified validator privacy as a key remaining barrier to institutional participation. The EIP-8222 lean staking proposal could help address this by closing the final validator-to-withdrawal link, but comes with tradeoffs including fixed denominations that can hurt capital efficiency and variable claim waiting periods.