Key Takeaways:

  • Ethereum price falls against the US dollar and Bitcoin.
  • Despite the price drop, interest in liquid ETH staking rises – investors prefer to stake instead of withdrawing.
  • Whales control over 36% of the ETH market, and the percentage continues to rise.
Ethereum is Garbage — Analyst Rants as Staking Yields Drop 30%

YEREVAN ( — Ethereum (ETH) is gaining negative attention as its standing in the crypto market dwindles compared to Bitcoin. And now, Steve Barbour, founder of Bitcoin mining service Upstream Data, has compared the top smart contracts platform with “garbage.”

“Ethereum is garbage,” says a Bitcoin proponent, but staking continues.

Let’s take a look at whether or not Ethereum’s situation is as dire as Barbour has claimed.

Ethereum Staking Yields Have Become Unattractive

Ethereum’s blockchain validator queue has drained out for the first time since the Shanghai upgrade in May, according to Coinbase’s latest research report.

In other words, demand for Ether staking has been slowing down. That is mainly due to the Ethereum validator entry staying at peak capacity for months, which, in turn, has lower staking yields from over 5% to its current level of 3.5%.

Ethereum staking yield drops, number of ETH 2.0 validators are high
Ethereum validator queue. Source: Coinbase Report

Middlemen liquid staking solutions, for instance, have witnessed a 1,000-time growth in their reserves so far in 2023, according to CoinGecko.

As of August 2023, liquid staking protocols accounted for 43.7% of the total 26.4 million ETH staked, worth nearly $48 billion.

TVL of top 10 LSD finance protocols reached $920 million. Source:
TVL of the top 10 LSD finance protocols reached $920 million. Source:

Moreover, the top eight ETH LSDs have offered an average yield of 4.4% Annual Percentage Yield (APY) since January 2022.

Ethereum Stays Weaker Versus Bitcoin

Ethereum’s lowering validator queues coincides with an ongoing capital outflow toward Bitcoin.

For instance, the widely-tracked ETH/BTC pair has dropped 30% from its 2023 high of 0.054 BTC. The plunge appears as Ethereum-specific investment funds see $111 million worth of withdrawals in 2023, underperforming Bitcoin funds that have seen $260 million worth of inflows.

Ethereum price analysis versus Bitcoin
ETHBTC daily price chart. Source: TradingView

Bitcoin ETF approval hopes, and its upcoming halving in April 2024 has reduced Ethereum’s investment appeal.

Ethereum’s Richest Addresses Are Becoming Richer

Furthermore, according to another on-chain data provider, Santiment, top addresses on Ethereum now control over 36% of the supply (yellow area) while the number of ETH on exchanges (red line) wanes.

ETH supply on exchanges drops while whales accumulate. Source:
ETH supply on exchanges drops while whales accumulate. Source:

Moreover, most of those “top addresses” are Ethereum millionaires.

Ethereum’s whale addresses in the billionaire tier (holding at least 1M ETH) now hold 32.3% of the available supply for the first time since 2016. [Oct 17’s] transactions valued at $1M+ also had its 2nd highest day in 5 weeks.

tweeted the platform.

Some of these addresses may belong to exchanges and liquid staking providers.

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