The end of "net outflow" for staking, can Ethereum usher in a strong breakout?

Original Author: KarenZ, Foresight News

At the end of 2025, the Ethereum network is experiencing a critical turning point: the "entry queue" for validators has reversed and surpassed the "exit queue."

This means that after months of market fluctuations, the amount of funds attempting to stake Ethereum as validators has far exceeded the amount wanting to unstake and exit.

This change is not just a numerical shift; it is a barometer of market sentiment and network fundamentals, indicating that the prolonged selling pressure is gradually easing. It also suggests that, driven by multiple factors such as the return of confidence among some institutions, the Pectra upgrade optimization, and the clearing of DeFi leverage, the Ethereum network is entering a new cycle of enhanced security and capital accumulation.

Reversal of the Ethereum Validator Queue

According to the latest data from the Ethereum Validator Queue, approximately 739,824 ETH are currently queued to enter the network, with an expected waiting time of 12 days and 20 hours; the exit queue has only 349,867 ETH, which will take about 6 days to clear.

In addition, the total amount of staked Ethereum is approximately 35.5 million ETH, accounting for 29.27% of the total supply, with the number of active validators reaching 983,600.

What is the Validator Queue? Why is it Important?

Under Ethereum's Proof of Stake (PoS) mechanism, to ensure the stability of consensus, the protocol stipulates that nodes cannot enter and exit freely but are regulated through a "Churn Limit" mechanism.

Currently, the maximum number of validators that can join (activate) or exit per epoch (approximately 6 minutes and 24 seconds) is capped at 256 ETH, equivalent to a processing capacity of about 57,600 ETH per day.

• Entry Queue: A queue for those who stake 32 ETH to apply to become validators. An increase in this queue indicates strong staking demand and optimism about long-term returns.

• Exit Queue: A queue for those applying to withdraw funds. An increase in this queue usually signals selling pressure, liquidity demand, or deleveraging behavior.

Therefore, the validator queue is not only an indicator of network health but also a barometer of market sentiment.

How Has the Validator Queue Changed in 2025?

Throughout 2025, the Ethereum validator queue has experienced significant fluctuations:

• In the first half of the year until autumn: The exit queue reached record highs multiple times, primarily due to institutional rotations, profit-taking, DeFi deleveraging (such as the surge in Aave lending rates leading to the liquidation of stETH circular lending), and individual security incidents (such as Kiln exiting all Ethereum validator nodes in September).
• In mid-September, the exit queue peaked at 2.67 million ETH, with a waiting time of up to 46 days.
• From September to October: The "entry queue" briefly surpassed the "exit queue," but was soon dominated by the "exit queue" again.
• In November: The "entry queue" grew back to over 1.5 million ETH, but the "exit queue" once reached over 2.5 million ETH.
• By the end of December: The "entry queue" reversed, with approximately 739,824 ETH currently queued to enter the network, while only 349,867 ETH are in the exit queue.

Four Core Driving Forces Behind the December Reversal

This reversal is not coincidental but the result of the interplay of capital, technology, and the macro environment:

Large Staking by Treasury Companies like BitMine

Just two days before the reversal (December 25-27), BitMine staked a total of 342,560 ETH (approximately $1 billion), directly driving the queue reversal.

Moreover, BitMine has previously stated its plan to launch a dedicated staking infrastructure—Manufactured Validator Network (MAVAN) in the first quarter of 2026, demonstrating its long-term commitment to the Ethereum staking ecosystem.

At the same time, another leading treasury company, SharpLink, has completed staking nearly 100% of its ETH, further contributing to the inflow momentum.

Despite the current severe challenges in the crypto treasury sector, with some institutions slowing down their ETH accumulation pace and even cases like ETHZilla liquidating, the substantial investments by leading players like BitMine and SharpLink have largely stabilized the foundational ecosystem of Ethereum staking.

Pectra Upgrade Optimizing Staking Experience

The Pectra upgrade implemented in May 2025 introduced key improvements through EIP-7251: increasing the maximum effective validator balance from 32 ETH to 2048 ETH and enabling reward compounding and validator consolidation. This has reduced the operational costs for institutions managing thousands of validator nodes, providing technical convenience for large capital entry.

Kiln's Reopening of Staking

Kiln exited validators on a large scale after a security incident in September 2025. While it is unclear when Kiln will restart staking, data from Beaconcha.in shows that Kiln currently holds a 1.68% share in the Ethereum staking ecosystem.

DeFi Deleveraging Approaching Its End

In June and July, rising lending rates on Aave forced the liquidation of stETH circular leverage strategies, triggering temporary selling pressure. Recently, as the deleveraging process gradually clears, the related exit demand has been diminishing, with market inflow demand taking the lead.

Some Institutions Buying the Dip

The market has adjusted for several days, and some institutions are optimistic about ETH's long-term value. Trend Research is preparing to continue accumulating ETH with $1 billion. On December 25, Ai Yi confirmed with Jack Yi that the real cost of the ETH accumulated by Trend Research since November is approximately $3,150, meaning the 645,000 ETH held currently has an unrealized loss of about $143 million. After the subsequent $1 billion investment, the average cost of ETH is expected to be controlled at around $3,050.

Conclusion

The reversal of the Ethereum validator "entry queue" surpassing the "exit queue" marks the initial formation of a net inflow dominance in staking since July. This change is not merely a numerical leap but a key signal of market confidence rebuilding. Of course, whether this leading trend can continue to solidify remains to be seen over time.

Although there has not yet been significant net inflow into Ethereum spot ETFs, the improvement in on-chain fundamentals is evident. As Joseph Chalom, co-CEO of SharpLink Gaming, stated this month, the surge in stablecoins, tokenized RWA, and the growing interest from sovereign wealth funds could drive Ethereum's TVL to grow tenfold by 2026.

As we stand at the tail end of 2025, is Ethereum ready to take off in 2026? The answer will be revealed by time.

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