We recently covered the growing load on the Ethereum network due to the massive inflow of validators. The project's developers estimate that the number of validators will double by mid-2024 to reach 2 million.

However, the market is making adjustments. In 2023, Ethereum lost 20% against Bitcoin.

Investors' last hopes were on the launch of Ethereum futures ETFs in October, but that has been mediocre. On the first day of trading, altcoin ETFs attracted just 1.3% of the amount raised by a similar Bitcoin-based fund in 2021 ($7.4 million vs $571 million, respectively). Trade volume was even lower, coming in at 0.19%.

The yield from staking now stands at 3.5% APY, which doesn't even come close to bridging the difference between Ethereum and Bitcoin.

This, coupled with the poor reaction to the ETFs' launch, has led to disappointment among altcoin investors. The queue for participation in staking has declined to nearly zero, whereas there were over 50,000 willing participants back in September.

The main factor restraining the altcoin's growth is the position of the SEC, which is seeking to label the cryptocurrency as a security. Coinbase received a pre-enforcement action notification in March but refused to quit the staking programme voluntarily. If the court sides with the SEC, Ethereum will receive another painful blow. The US cryptocurrency exchange ranks second In Ethereum staking with 2.3 million staked coins and a share of 8.4%.

With Coinbase leaving the market, Ethereum's other problem, centralisation, will become exacerbated. Some clients are likely to join the Lido Finance pool, which has a 32% share.

Vitalik Buterin has admitted that the increase in centralisation is one of the network's major problems and that the solutions being considered are far from ideal. He estimates that it will take 10-20 years to resolve the situation.

StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)