The Ethereum exit queue has fallen near zero for the first time since mid-2025, while the entry queue has surged to multi-month highs. Analysts point to shrinking exchange reserves and aggressive institutional staking—led by BitMine—as evidence that sell-side pressure is drying up. At the same time, Grayscale made history by issuing the first staking rewards payout for a US-listed spot Ethereum ETF.
Ethereum Exit Queue Nears Zero
The Ethereum network is showing fresh signs of tightening supply and confidence among long-term holders, as the validator exit queue has fallen back toward zero for the first time since July last year. Data from Beaconcha.in shows the current exit queue sitting at just 224 ETH, with a wait time of roughly six minutes. This is a huge decline from its peak of around 2.67 million ETH in mid-September, when large numbers of validators were lining up to unstake.
At the same time, the validator entry queue surged to 1.3 million ETH, its highest level since mid-November. This suggests that there is renewed demand for Ethereum staking.
Ethereum validator queue (Source: Beoconcha.in)
Analysts interpret this divergence as a meaningful shift in market behavior. Rostyk, chief technology officer at Asymetrix and founder of ETHKyiv, said the exit queue is now “basically empty,” and added that “no one wants to sell their staked ETH.” The dynamic suggests validators are more comfortable keeping ETH locked up rather than freeing it for sale.
Tevis, founder of the AlphaLedger trading app, pointed to broader supply-side factors reinforcing this trend. According to him, ETH exchange reserves are now at ten-year lows, which indicates that readily sellable supply continues to shrink. With selling pressure drying up, validator entry queues are now far outpacing exits, a trend he attributes in part to institutional players and exchange-traded products staking Ethereum for yield rather than holding it idle.
The validator exit queue plays a critical role in Ethereum’s security model, as it limits how quickly validators can fully exit the network. This rate-limiting mechanism is designed to prevent sudden mass departures that could undermine network stability.
While queued, validators remain active and continue earning rewards, though they are still subject to penalties if they behave improperly. This system is distinct from the withdrawal queue, which handles partial withdrawals where excess staking rewards are automatically skimmed without requiring validators to exit.
A near-zero exit queue means there is effectively no backlog of validators seeking to leave, allowing any new exit requests to process immediately. Analysts predicted in December that the queue could eventually fall to zero, and current data suggests those expectations are now being realized.
Institutional participation has been a key driver of the renewed staking momentum. BitMine, the world’s largest Ether digital asset treasury, has ramped up staking aggressively iover the past few weeks. The company began staking ETH on Dec. 26 and added another 82,560 ETH—worth roughly $260 million—to the entry queue on Jan. 3. In total, BitMine has now staked 659,219 ETH, valued at about $2.1 billion at current prices.
ETH price action over the past week (Source: CoinCodex)
Ethereum ETF Staking Rewards Begin
Meanwhile, Grayscale took a milestone step in the US crypto investment market by declaring the first-ever staking rewards distribution for a US-listed spot crypto exchange-traded product. The payout applies to the Grayscale Ethereum Trust ETF (ETHE) and is the first time investors in a US-traded spot crypto ETP will receive a scheduled cash distribution generated from Ethereum staking rewards.
According to a press release that was published Monday, ETHE shareholders will receive approximately $0.08 per share, based on holdings recorded at market close on Monday. The distribution comes from proceeds generated by staking rewards that were earned and then converted into cash, rather than being distributed in ETH itself.
Grayscale press released
Grayscale began activating staking across its Ethereum products on Oct. 6, working through institutional custodians and third-party validator providers. That move made both ETHE and the Grayscale Ethereum Mini Trust ETF the first US-listed spot crypto ETPs to gain exposure to Ethereum staking yields.
In Ethereum’s proof-of-stake system, staking involves locking up ETH to help validate transactions and secure the network, in exchange for periodic rewards. Grayscale’s structure converts those rewards into US dollars before distributing them to investors.
The ability to stake stems in part from the regulatory framework under which Grayscale’s funds operate. Unlike most traditional US ETFs, Grayscale’s products fall outside the Investment Company Act of 1940, the primary statute governing US exchange-traded funds. This structure allows for staking activity, though it also means the funds carry a different set of regulatory protections compared with conventional ETFs.
While Grayscale is currently the only US-listed issuer distributing staking-linked payouts, other asset managers are planning to follow. Several spot Ethereum ETFs are awaiting regulatory approval to add staking features. In March, Cboe BZX filed a proposed rule change seeking approval to enable staking for the Fidelity Ethereum Fund, following a similar February filing for the 21Shares Core Ethereum ETF. Meanwhile, BlackRock registered a staked Ethereum ETF in Delaware in November.
