Ethereum experienced its highest validator exit on record as it faced a staggering withdrawal queue of over 2.4 million Ether, translating to approximately $10 billion. This unprecedented surge has prompted concerns regarding the potential sell pressure on Ether’s price. However, institutional players, most notably Grayscale, are stepping in to fill the void left by exiting validators.

The exit queue for Ethereum validators exceeded 2.4 million Ether on Wednesday, triggering wait times of over 41 days. Validators are essential for the network as they verify transactions and add new blocks, thus maintaining the integrity of the system.

Ether validator queue. Source: validatorqueue.com

$10 billion in Validator Withdrawals Raises Concerns

The spike in withdrawals has raised alarms over selling pressure for Ether holders. Although not all validators intend to sell, a considerable portion of the $10 billion could potentially be liquidated, especially given Ether’s impressive price increase of 83% over the past year.

ETH/USD, one-year chart. Source: Cointelegraph

Currently, the validator exit queue is significantly larger—about five times—than the entry queue, which contains over 490,000 Ether waiting to be staked. Despite the withdrawals, Ethereum’s network continues to operate with stability, having over 1 million active validators.

The recent surge in withdrawals occurred shortly after Grayscale invested $150 million into Ether, subsequently depositing another 272,000 Ether worth approximately $1.21 billion into the staking queue.

Source: EmberCN

Iliya Kalchev noted:

“Institutional and corporate treasuries now hold over 10% of ETH’s total supply, while October ETF inflows have already exceeded $620 million.”

This activity underscores Ethereum’s trajectory towards becoming a recognized institutional asset with yield-bearing potential.

Read more about how Ethereum treasury firms could spark ‘DeFi Summer 2.0’