Ethereum’s Exit Queue Jumps To Record High As Celsius Unstakes

The waitlist for Ethereum stakers seeking to exit the network has jumped to a record high as Celsius moves to unstake its ETH holdings.

The queue for stakers exiting Ethereum’s consensus layer, the Beacon Chain, surged to a record high of 16,283 validators on Jan. 4 — significantly beating out its previously high of 3,829 from Dec. 4, according to Validator Queue.

The waitlist is projected to take five and a half days to clear. A maximum of 13 validators can offboard per epoch, with each epoch lasting roughly 6.4 minutes.

Analysts have attributed the move to Celsius, the failed CeFi lender, announcing it will unstake all of its existing Ether holdings on the same day. Celsius said it is in the process of recalling and rebalancing assets in preparation to distribute assets to creditors. In August, Celsius said it plans to distribute nearly $2B worth of BTC and possibly ETH to creditors.

“The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors,” Celsius tweeted.

Celsius filed for bankruptcy in July 2022 after halting user withdrawals one month earlier. A July 2023 settlement with the U.S. Federal Trade Commission found that Celsius had misappropriated more than $4B worth of customer funds prior to suspending operations.

On Dec. 20, An Ape’s Prologue, a web3 researcher, tweeted that Celsius had sold $243M worth of Ether over 30 days. Data from Arkham Intelligence suggests Celsius still holds $227M worth of ETH.

Ether ETF speculation runs rampant

Despite the looming possibility that Celsius may move to liquidate the remainder of its sizable Ether holdings, many onlookers believe spot ETF speculation could soon drive gains for ETH.

With prominent analysts tipping that the U.S. Securities and Exchange Commission (SEC) may greenlight the first spot Bitcoin ETF next week, an increasing number of researchers are turning their attention to Ether as the next likely candidate for spot ETF approval.

“Expect more spot Ethereum ETFs filings in the coming days,” tweeted James Seyffart, a Bloomberg analyst who expects the SEC to approve an initial cohort of spot Bitcoin ETFs sometime around Jan. 10.

During a webinar hosted by CryptoQuant on Jan. 4, Eric Balchunas, a fellow Bloomberg analyst, argued that the launch of Ether futures ETFs in October implicitly treats ETH as a commodity and paves the way for a spot ETF to also receive approval.

“By approving those Ethereum futures ETFs, they’re implicitly accepting those Ethereum futures as commodities futures,” Balchunas said. “If they call Ethereum a security, it’ll be going against their sister regulator, CFTC... That’s why I think we could see potential Ethereum ETFs approved this year as well.”

Satoshi Flipper, a popular trader and analyst, argued that Ether’s current price does not reflect its spot ETF prospects.

“Not even 1 cent of the proposed spot ETH ETF has been priced in yet,” they tweeted. In my humble opinion… if the market was rational and forward-thinking, the price of ETH would shoot to $3,000 upon the spot BTC ETF approvals this week.”

DCinvestor, a prominent investor and web3 influencer, shares the sentiment.

“Once the BTC ETF hits, literally everyone in the newly emergent ‘TradFi crypto sector’ will be looking at the fact that only one other asset has CME futures, a live futures ETF, has been referred to in the past as a ‘commodity’ by the CFTC and prior SEC chairs,” they tweeted. “It’s ETH.”