While the supply of ether is rising, the amount that is staked is close to all-time highs, CryptoQuant data shows.

Polymarket bettors are assigning a 90% chance to an ether exchange-traded fund being approved in the U.S. by July 26, but there are still several steps that must take place before one can trade.

As an ether (ETH) exchange-traded fund (ETF) moves closer to reality in the U.S., the amount of ether staked is nearing a record high, keeping the circulating volume in check even though the total amount of ETH is growing again.

“The total number of staked ETH has continued to increase and sits near its all-time high as it stands at 33.3 million ETH or 27.7% of the total supply,” Julio Moreno, CryptoQuant’s head of research, wrote in a note shared with CoinDesk.

The increasing supply of the second-largest cryptocurrency is a sign it has returned to being an inflationary asset, undermining its capability to act as a store of value over time. There are ways to counter this such as staking, which locks ether for a fixed period of time, and burning – or permanently removing from circulation – a portion of the transaction fees paid by users.

“ETH supply is growing again, although slowly. But the narrative of ultra-sound money has ended. The total supply is at its highest level since December 11, 2023,” Moreno wrote.

Moreno also wrote that spot trading volume data shows ether could be as liquid as bitcon (BTC), with ETH spot trading volume being 80%-90% of that of bitcoin in the last few weeks.

Data from CoinMetrics, meanwhile, shows that around 12% of ether’s supply is being used in smart contracts or bridges that connect between blockchains. Between that amount and the tokens that are staked, roughly 40% of the cryptocurrency is “locked” and not being actively traded.

Path to the ETH ETF

The race to launch an ether exchange-traded fund (ETF) appears to be heating up, and Polymarket bettors appear to think that they will begin trading before July 26.

Recently, Invesco and Galaxy announced they will charge a 0.25% management fee for their proposed spot ether ETFs, slightly higher than VanEck’s 0.20%.

But before trading can begin, the SEC must provide feedback on the current applications, and issuers need to file final amended forms with fee information and other required details.

Over on Kalshi, bettors are giving a 65% chance that ether will outperform bitcoin, but are 95% sure that ether won’t hit an all-time high before its larger peer.