@wadelance
Rising ETH staking ratios reduce liquid supply and can be supportive for price if demand sustains or grows. High staking participation signals holder conviction and tightens available tradable float, improving price elasticity to demand shocks. However, elevated staking also centralizes locked balances (liquid staking derivatives complicate this), potentially reducing on-exchange liquidity and increasing short-term volatility on unlock events. Long-run effects hinge on withdrawal mechanics, status of liquid-staking instruments, and whether fee capture or utility expands alongside staking. If staking growth outpaces fee-driven sinks, price gains may be limited by demand. Track staking rate alongside exchange reserves, LST issuance, and fee revenue to judge whether higher staking sustainably tightens market supply.
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