Bitstamp CEO says he’s been ‘blown away’ by interest in ether staking as exchanges gear up for ethereum 2.0

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The excitement is building around Ethereum staking.

  • The CEO of Bitstamp was “blown away” by the interest in ether staking, he told Insider.
  • Bitstamp is one of many exchanges to add ether staking amid the excitement surrounding Ethereum 2.0.
  • In staking, users deploy tokens to gain the right to validate transactions and earn more crypto.
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Bitstamp crypto exchange CEO was “blown away” by interest in ether staking on the platform as excitement builds around a sector that JPMorgan believes could be worth $ 40 billion in five years.

In crypto staking, users create their own tokens to receive the right to validate transactions on blockchain networks and earn more cryptocurrency as a reward.

Bitstamp added Ethereum staking to its offering in July. The exchange was launched in 2011 and is the eleventh largest.

“We were … overwhelmed, if that’s the right term in terms of interest,” Julian Sawyer, CEO of Bitstamp, told Insider this week. However, he did not disclose how much had been used so far.

Sawyer said that Bitstamp users who have chosen Ethereum – the cryptocurrency of the Ethereum network – stake an average of 50% of their holdings.

“That says a lot. It’s not the people who play [and saying] ‘Oh, I’ll just put 1%, 10% over there, I’ll put a hundred dollars in it.’ These are the people who deal with the range of products and the interest rate. “

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The excitement has built around staking largely thanks to the upcoming upgrade to the Ethereum network known as the move to Ethereum 2.0.

The network will move from a “proof-of-work” system, in which so-called miners use huge amounts of computing power to validate transactions, to a “proof-of-stake” mechanism. The developers hope that the transition will be completed in early 2022.

The upgrades could help the staking industry grow to $ 40 billion by 2025, JPMorgan analysts, led by Kenneth Worthington, said in early July. Worthington and colleagues said exchanges like Coinbase will benefit from the sector’s growth.

More than 6.4 million ethers – valued at $ 15.1 billion on Friday – have already been staked on the Ethereum 2.0 network, according to Etherscan.

However, users who want to use Ether, including on exchanges like Bitstamp and Coinbase, will have to lock their coins until the upgrade is complete. Ether staking is also not available to Bitstamp’s US customers.

Sawyer said the fact that users are ready to block their tokens shows how people are becoming increasingly involved in the crypto sector.

The Bitstamp chief, who has been running the company since October 2020, also said that interest in ether has grown significantly compared to interest in Bitcoin. He said this shows that people are more interested in other parts of the crypto world.

Although many retail investors are interested in ether staking, an executive at a top crypto exchange said institutional investors are more cautious due to the lock-up period, during which the price could fluctuate sharply.