BitMine Immersion (BMNR), a firm led by Fundstrat’s Tom Lee, has triggered a massive collapse in Ethereum’s staking system after injecting billions of dollars. The massive flow of capital has pushed the wait time for new validators to over 44 days. This situation represents the largest operational backlog recorded in the network since mid-2023.
On the other hand, network data shows that more than 2.55 million ether are currently waiting for activation. This figure is equivalent to approximately $8.3 billion that remains inactive while waiting for their turn to generate rewards. Likewise, the surge in staking activity is putting unprecedented pressure on the network’s technical infrastructure. The security budget of Bitcoin and Ethereum depends on fluid validation processes that are now completely congested.
It is also relevant to note that BitMine holds a treasury exceeding $13 billion in ETH currently. To date, the company has confirmed the staking of 1.25 million tokens, representing only one-third of its total holdings. Nevertheless, the firm still holds millions of additional coins that could worsen the queue in the coming weeks. The flow of institutional capital into staking is redefining the operational capabilities of the most important smart contract network.
Impact of large treasuries on validator activation time
Furthermore, Ethereum intentionally limits the number of new daily validators to protect protocol stability. Therefore, when a massive capital entry like BitMine’s occurs, the system automatically creates a processing queue. In this way, new participants must wait over a month to begin receiving financial returns on their deposits.
This technical paralysis could complicate the entry of new exchange-traded funds seeking passive returns for their clients.
In addition, the current landscape contrasts sharply with the situation experienced during the last quarter of last year. In that period, the network faced an inverse congestion due to a massive exodus of validators due to external technical problems.
For this reason, volatility in entry and exit queues generates uncertainty among institutional asset managers. Companies offering custody and staking services must now deal with operational inefficiency that reduces profit margins.
How will the BitMine backlog affect the arrival of new staking ETFs?
Likewise, financial giants such as BlackRock and Grayscale are closely watching these network metrics as their regulatory filings progress. If wait times continue to rise, the appeal of financial products based on staking rewards could decrease significantly.
Therefore, the persistent activation of large treasuries will hinder access for minority investors seeking to participate in the ecosystem. The loss of income during the waiting period is a factor that analysts are calculating with extreme caution.
Thus, it is estimated that approved investment vehicles hold nearly 10% of Ethereum’s circulating supply. Therefore, if they all decide to activate staking simultaneously, the waiting queue could extend for several additional months.
Consequently, Ethereum’s technical infrastructure faces a trial by fire in the face of modern institutional capital’s voracious appetite. Asset management becomes extremely complex when the network cannot process validation demand in real time.
Finally, the crypto-finance market enters a phase where institutional liquidity clashes with technical code limits. It is expected that the network may have to evaluate protocol adjustments if these backlogs become a permanent norm in the future.
For this reason, BitMine’s success could be an obstacle for other participants looking to enter the market quickly. The eyes of developers are now focused on optimizing these entry processes to maintain the platform’s competitiveness.
