In the past 30 days, the value of Ethereum (ETH) has seen a downward trend, with a decline of over 11%. Despite these ETH price fluctuations, the amount of supply staked in Ethereum’s smart contract has been setting new records. August was a challenging month for ETH, as it lost all the gains it had accumulated over the preceding month. From a comfortable mid-$1800 range two weeks prior, ETH has been navigating the rough waters of the $1600 range.
Understanding the Profitability of Ethereum
At the time of writing, ETH was trading at $1,649, a significant drop from its previous standing, as per CoinMarketCap data. This price correction has had a ripple effect on the overall profitability of the network. According to a recent update from Glassnode, only about 55.42% of all ETH addresses were in profit, the lowest it has been in seven months.
The Net Unrealized Profit/Loss (NUPL) indicator can provide a clearer picture of profitability. This metric measures the difference between unrealized profit and unrealized loss, giving an overview of whether the network is in a state of profit or loss. Although the network remains in net profit, the degree of profitability has taken a hit, with the NUPL falling to 0.032 from 0.13 prior to the price correction.
Staking Remains Unaffected by Price Decline
Interestingly, the bearish trend in ETH’s price has not dampened the spirits of stakers. Unperturbed by the market’s volatility, the supply locked in Ethereum’s staking smart contract continues to reach new heights. The latest data shows that more than 28 million ETH have been staked with the network, which accounts for approximately 23% of Ethereum’s total circulating supply.
This surge in staking is a testament to investors’ confidence in the mechanism, a sentiment that was not as prevalent before the Shapella upgrade. Since the hard fork’s implementation, the staked supply of ETH has increased by over 50%.
Ethereum Adoption on the Rise
Alongside the increase in staking, the overall adoption of ETH has also seen a steady rise. The number of addresses holding a positive number of ETH tokens is nearing 105 million, marking a consistent growth pattern since its inception almost eight years ago. It can be speculated that more people are buying ETH with the intention to stake rather than trade, as trading volumes of ETH have been on a downward trend in recent months.
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