As a result, the price of ETH could return to $4,000. The number of Ethereum 2.0 ‘full validators’ has dropped to a 17-month low.

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According to Glassnode info, the number of Ethereum addresses containing at least 32 ETH has been steadily declining in recent months.

The number of Ethereum addresses holding more than or equal to 32 Ether (ETH) has been dwindling, indicating a potential lack of confidence among traders and investors in being “full validators” for the blockchain’s upcoming proof-of-stake blockchain.

At the same moment, the price of Ethereum (ETH) has risen back over $4,000 on Friday, while Bitcoin (BTC) is attempting to retake $51,000 after this week’s “Elon candle” drop.

Eth2 validators wanted?

On-chain data analytics platform Glassnode revealed that the number of externally owned Ethereum addresses (EOA) fell to its lowest levels in the last 17-months — to 108,915. As of November last year, the count was around 127,500.

Total number of addresses holding 32+ ETH vs. Ether price. Source: Glassnode

According to Glassnode researchers, Ethereum addresses containing at least 32 ETH tokens are “potential validators” on the Eth2 blockchain. In retrospect, to become a complete node validator in the forthcoming Ethereum proof-of-stake protocol, users must deposit at least 32 ETH. As a result, ETH creditors will be in charge of saving records, handling transfers, and adding new blocks to the Ethereum blockchain.

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The staking feature helps to protect the Ethereum network while still maintaining consistent ETH incentives for companies who stake their money in order to achieve the mettle. It also represents the Ethereum developers’ goal of making their public ledger cheaper, quicker, and more scalable for consumers — in other words, ensuring a transition from an energy-intensive proof-of-work protocol to a proof-of-stake protocol following community acceptance.

The Eth2 smart contract went live on Nov. 4 via a “Beacon Chain upgrade” and sought at least 524,288 ETH to meet a so-called genesis threshold, the one that proves actors’ consent over Ethereum’s upgrade to PoS. The smart contract had 4,563,074 ETH as of Friday, 9:40 a.m. GMT. Just 37 minutes earlier, at the time of publishing, a Kraken address became a complete validator on the Eth2 network.

Rich homies only

For many retail investors, being a complete validator on the Ethereum network remains a lofty goal, since it necessitates first acquiring 32 ETH, or $128,000 at today’s rates. After the Beacon Chain update, the cost of purchasing one Ether has risen by almost 900 percent.

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ETH soars after the Beacon Chain upgrade on Nov. 4, 2020. Source: TradingView

The Glassnode data (shown in the first image) indicates a strong association between the 32+ ETH holders and the spot price of Ether. They seem inverse to one another, indicating a decline in investor confidence in becoming a complete node validator. Instead, they are anxious to reap rapidly from the recent bull run in cryptocurrency markets.

But that doesn’t mean Eth2 isn’t attracting new investors. The project allows limited partners to pool their ETH shares using third-party providers. The mutual fund then invests 32 ETH into the Eth2 smart contract.


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