Original Title: "Ethereum's $1.9 Billion Unstaking Wave: Taking Profits or a New Chapter for the Ecosystem?"

Original Source: DeepTech TechFlow

Whenever the market is doing well, FUD is never far behind.

Today, a piece of news has once again sparked concerns about ETH's price:

Validators on the Ethereum network are in line to unstake their ETH.

As a representative of the PoS consensus mechanism, staking ETH is used to technically secure the entire Ethereum network and economically earn additional staking rewards, locking ETH liquidity in the staking pool.

However, according to Validator Queue data, as of July 23, Ethereum validators have accumulated approximately 521,252 ETH in the unstaking queue, with a calculated value of about $1.93 billion at the current price, and the unstaking queue wait time exceeds 9 days and 1 hour.

This is also the longest queue validators have faced when choosing to unstake in the past year.

Since each validator typically stakes 32 ETH, theoretically, this is equivalent to over 16,000 validators seeking to unstake. The large-scale queue for unstaking raises some concerns.

Taking Profits?

Are whales and institutions selling ETH to take profits?

The surge in Ethereum's unstaking may be partly related to the recent price increase.

Starting from a low point in early April 2025 (in the range of $1,500-$2,000), ETH has experienced a strong rebound, with a cumulative increase of 160% so far. Specifically, on July 21, ETH reached a high of $3,812, which is the peak of the past seven months.

Rapid price surges often prompt some investors to take profits, especially early stakers, who may decide to realize gains upon seeing profits rather than continue holding.

From a historical perspective, this pattern is not uncommon.

In January and February 2024, when the ETH/BTC ratio surged by 25% within a week, a similar-scale unstaking wave occurred, causing a short-term price drop of 10%-15%. However, it was also around the same time that the Celsius bankruptcy liquidation occurred, with 460,000 ETH unstaked in a short period, leading to a congestion in the entire ETH network validator queue for about a week.

Not Selling Pressure

In contrast to previous instances, although the unstaking queue for ETH this time was long and the unstaked amount was substantial, it did not directly translate to selling pressure.

First, looking at the Validator Queue data, on July 23rd, there were 520,000 ETH queued for unstaking, but at the same time, 360,000 ETH entered the staking queue.

These two factors offset each other significantly reducing the net ETH exiting the Ethereum network.

Secondly, institutional behavior also played a certain buffering role.

Data from July 22nd indicated that the total inflow of ETH spot ETFs from various institutions on the public market amounted to $3.1 billion, a figure significantly higher in absolute value compared to the 520,000 ETH queued for unstaking ($1.9 billion).

Moreover, this was the net inflow of ETFs for just one day, not to mention the 9-day queuing period for validator exits.

Simultaneously, unstaking does not necessarily imply selling.

In the current environment of ETH's upward trend, concentrated unstaking is also likely due to institutions adjusting custody services or transitioning to a crypto treasury strategy, which essentially means changing the custodian of ETH to seek more returns, rather than selling off the ETH.

On-chain, some of the unstaked ETH is more likely to be used for DeFi and NFT-related activities. For example, providing liquidity as collateral or as seen yesterday, a whale was sweeping Crypto Punks floors;

Additionally, on-chain LST tokens often experience depegging, providing arbitrage opportunities for ETH — for instance, the recent stETH to ETH ratio dropped to 0.996 (a discount of about 0.04%), and weETH experienced similar fluctuations. Arbitrageurs buy discounted LST and wait for the recovery to 1:1 anchoring to profit, a process that increases ETH demand.

Overall, unstaking appears to be more of an internal adjustment within the Ethereum ecosystem rather than a direct sell signal.

However, there are various speculations on social media. While concentrated unstaking may not necessarily indicate selling pressure, it is highly likely to point to a phenomenon known as “Whale Exchange”.

Some believe that BlackRock, a firm dedicated to advancing cryptocurrency into the mainstream financial sector, has effectively become Ethereum's whale. As of July, BlackRock has accumulated over 2 million ETH (worth around $6.9-8.9 billion), accounting for about 1.5%-2% of the total ETH supply (around 120 million ETH).

This is not a secret but rather a transparent ETF asset management practice. Therefore, this appears more like institutional-level “public whale” behavior—promoting Ethereum's institutional adoption through ETFs' public holdings and accumulation, rather than market manipulation.

The logic behind the Whale Exchange is that as Ethereum shifts from an in-circulation value consensus to a more widely recognized financial instrument consensus, it has become increasingly evident that Wall Street is gearing up to make a big splash.

This speculation is not unfounded, as staking and unstaking may also reflect a chip structure transition.

Nevertheless, Ethereum's scalability will continue to support its leadership in the cryptocurrency field, and this unstaking wave may just be the starting point of a new cycle.

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