Institutional investors turn to Ethereum staking, opening new rise points

As Bitcoin reserve strategies mature, new institutional investors are turning their attention to Ethereum. Compared to simple asset appreciation, Ethereum offers institutions more opportunities to participate in ecosystem development. Through staking, these institutions can not only obtain stable and sustainable on-chain returns but also deeply engage in network validation, promoting the entire staking sector towards scalability and compliance.

Bitcoin has recently reached new highs, with the driving force behind it shifting from retail investors to a collective push from institutional investors. The approval of spot ETFs has provided a compliant entry channel for Wall Street, while some listed companies have significantly increased their balance sheet value by classifying Bitcoin as a reserve asset, further enhancing the credibility of Bitcoin as an asset allocation choice.

However, the reserve strategy of Bitcoin has matured, making it difficult to replicate the advantages of early entrants. In contrast, Ethereum is becoming the new focus of rise. Unlike Bitcoin, Ethereum adopts a PoS consensus mechanism, allowing institutions to participate in network validation and earn rewards through staking, thereby hedging against the dilution risk brought about by the addition of new ETH.

Many listed companies have begun to experiment with Ethereum reserve strategies. For these institutions, ETH is not only a balance sheet asset but also a productive asset for participating in the ecosystem. Ethereum's burning mechanism further reinforces this logic; when the network is active, the scarcity of ETH increases, and the actual returns for stakers also rise.

With the influx of institutional investors, the Ethereum stake market is shifting from being crypto-native to being institution-driven. Several ETF issuers have submitted applications to regulators to add staking features. Once approved, this will further expand the scale of the staking market. According to statistics, the total locked volume of liquid staking on Ethereum is nearing an all-time high.

Institutional participation has also brought new valuation perspectives to staking and other DeFi sectors. Some companies are exploring deploying ETH reserves into lending, liquidity provision, and other DeFi operations, which could trigger a reevaluation of value in related fields.

However, institutional investors have raised higher demands for the security, compliance, and liquidity management capabilities of the protocol. Many institutions are more cautious when selecting staking partners, preferring to choose large, compliant service providers, which may pose greater challenges for small and medium-sized staking protocols.

Currently, the Ethereum liquid staking market shows a significant head effect, with a few large protocols dominating. At the same time, some emerging projects are exploring subfields such as re-staking, infrastructure, and LSTfi.

Although the popularity of Ethereum's reserve strategy is on the rise, whether it can continue to support the development of the staking market still requires time and practical testing.