Ethereum Transactions Hit Record High as Staking, SEC Clarity Fuel ETH Rally

Ethereum network transactions rose to a record high as levels of staked ether (ETH) climbed to a record high, lifted by a regulatory boost for liquid staking.

The seven-day average of daily transactions on the blockchain touched 1.74 million earlier this week, overtaking the previous record of 1.65 million set on May 12, 2021.

The activity surge comes as the Securities and Exchange Commission’s Division of Corporation Finance said certain liquid staking activities and “staking receipt tokens” do not constitute securities under the 1933 Securities Act, provided they meet a strict set of assumptions.

Such a stance is bullish. It reduces legal uncertainty, making it safer for institutions and platforms to offer liquid staking products. That can boost demand for staked tokens like ETH, lock up more supply and support higher prices by reducing selling pressure.

More than 36 million ETH, or almost 30% of supply, is now locked in staking contracts, data from Dune Analytics shows. That's a signal that holders are willing to forgo liquidity for yield as prices make a push toward $4,000, a level not seen since December.

ETH’s price action has also been supported by the growing footprint of public “crypto treasury companies,” or firms that buy and hold tokens directly or through dedicated vehicles.

Those holding ETH now control $11.77 billion worth of the second-largest cryptocurrency, led by BitMine Immersion Technologies with 833,100 ETH ($3.2 billion), SharpLink Gaming with $2 billion, and The Ether Machine with $1.34 billion.

Ethereum co-founder Vitalik Buterin backed the trend in a Thursday podcast, saying treasury vehicles give investors more options, particularly those with different financial constraints. Still, he warned, excessive leverage could backfire.

“ETH just being an asset that companies can have as part of their treasury is good and valuable … giving people more options is good,” Buterin said.

“If you woke me up three years from now and told me that treasuries led to the downfall of ETH … my guess would be that somehow they turned it into an overleveraged game,” he told the Bankless podcast, outlining a scenario where forced liquidations cascade into deeper price losses.

Buterin expressed confidence that ETH investors would avoid such pitfalls, quipping, "these are not Do Kwon followers," referring to the founder of the failed Terra project.

ETH has rallied 163% from April’s low of $1,470 to trade near $3,909, narrowing its performance gap with larger rival bitcoin (BTC) and and Solana's sol (SOL).

More than 500,000 ETH — valued about $1.8 billion — was staked in the first half of June alone, according to CryptoQuant’s Onchainschool, which said the trend signals “rising confidence and a continued drop in liquid supply.”