Ethereum News Today: Institutional Treasuries Absorb ETH Unstaking, Sparking Dilution Fears

VanEck has issued a warning that growing institutional accumulation of Ethereum (ETH) through staking and exchange-traded fund (ETF) inflows could create asset dilution risks for unstaked holders. As of mid-August 2025, over $3.8 billion worth of ETH-approximately 877,000 tokens-is queued for withdrawal from staking, with a 15-day processing period title1^[1]. This surge in unstaking is led by major liquid staking platforms such as Lido (285,000 ETH), EthFi (134,000 ETH), and Coinbase (113,000 ETH) title1^[1]. Analysts note that while this represents significant liquidity, strategic reserves and ETF holdings have absorbed much of the potential selling pressure. Data from strategicethreserve.xyz reveals that institutional and ETF holdings of ETH have surged by 140% since May 1, reaching 10.1 million ETH title1^[1].

The interplay between unstaking and institutional accumulation highlights a shifting market structure. While large-scale withdrawals could theoretically increase supply pressure, analysts argue that much of the unstaked ETH is being redirected into institutional treasuries or ETFs rather than sold on open markets . For example, Viktor Bunin of Coinbase noted that unstaked ETH may be funneled into internal treasury funds, optimizing portfolio allocation without exerting downward price pressure . Additionally, Ethereum's staking demand remains robust, with staking queues outpacing unstaking volumes in recent weeks . This suggests sustained network participation and confidence in Ethereum's long-term value proposition.

A critical concern for unstaked holders lies in the concentration of ETH within institutional hands. If ETFs are approved to offer staking capabilities-a regulatory development expected by October 2025 -institutional inflows could further consolidate ETH's supply. Markus Thielen of 10x Research highlighted that staking-enabled ETFs could generate combined returns of up to 10% annually for institutional investors, combining spot price gains with staking yields . Such products could attract billions in capital, potentially exacerbating market concentration and reducing liquidity for retail participants.

The risk of asset dilution is compounded by Ethereum's current staking ratio. Nearly 29.5% of the circulating supply (35.7 million ETH) is already staked , with additional inflows from ETFs expected to push this figure higher. If institutional investors continue to prioritize staking over direct market sales, the effective supply of unstaked ETH could shrink, amplifying price volatility for remaining liquidity providers. This dynamic is further underscored by the recent $3.8 billion unstaking queue, which, while not an immediate sell signal, reflects strategic repositioning ahead of anticipated regulatory changes .

VanEck's analysis underscores the need for careful monitoring of these trends. While Ethereum's ecosystem remains resilient, the interplay between unstaking, institutional accumulation, and ETF-driven staking could redefine market dynamics. The outcome will depend on whether regulatory approvals for staking ETFs proceed as expected and whether institutional demand continues to outpace withdrawal pressures. For unstaked holders, the risk of asset dilution and reduced market liquidity remains a key concern as Ethereum transitions into a more institutionalized asset class.