While Ethereum has not been completely consistent in its upward trajectory over the past few weeks, its circulating supply has done the opposite. According to Data From Ultrasoundmoney, the circulating supply of ETH has increased to over 120.72 million ETH as of today.
While this increase in supply is not directly negative for ETH, it still represents a noticeable shift in network dynamics, largely fueled by the adoption of Ethereum’s Proof-of-Stake (PoS) model.
Increase supply, how and why?
The rise in the total supply of Ethereum to 120.72 million ETH, as shown in data from Ultrasound.money, reflects the increased activity on the network over the past month.
In this period alone, Ethereum saw 77,102 ETH issued, while 19,402 ETH were removed from circulation through the burn mechanism introduced in the network’s recent London Hard Fork.
The net increase of around 57,653 ETH highlights a slight increase in the annual supply growth rate from 0.58% to 0.69% over the past seven days.
It is worth noting that with Ethereum’s transition from a Proof-of-Work (PoW) model to a PoS model, the network not only achieved a major shift in security but also increased the rewards for participation.
As for the possible reasons behind the increase in supply, around 33.9 million ETH are currently on offer in the network, generating significant rewards in newly issued ETH.
This large-scale staking appears to be contributing significantly to the overall supply of Ethereum. Additionally, the staking process is further amplified by the restaking trend, where participants reinvest their staking rewards back into the network.
This restocking cycle creates a compounding effect on the issuance of new ETH, boosting supply even as the network moves into an “ostensibly” inflationary path after the initial deflationary expectations set by the ETH burn mechanism.
Ethereum Market Performance
So far, Ethereum appears to be on a gradual price rise, from $2,500 last Thursday to currently trading at $2,652 at the time of writing, representing a 9.3% increase in the past seven days.
This increase in value coincides with the valuation of the market cap of Ethereum, which has seen an increase of about $20 billion during the same period. Despite this increase, the daily trading volume of Ethereum has seen the opposite.
In particular, over the past week, the value of this metric has dropped from over $21 billion to $12.8 billion currently. Regardless, many cryptocurrency analysts remain bullish on Ethereum.
Earlier today, a well-known analyst known as Crypto Giant on X set a target of $3,000 for ETH. According to the analyst, ETH looks set for a major rally as the “CME futures gap” to the upside is still incomplete.
#alternative currencies #Ethereum $3000 goal
#Ethereum The market appears to be ready to move, with a gap in CME futures above still waiting to be filled. pic.twitter.com/6lC2d6lgQ6 – Crypto Giant (@Washigorira) August 15, 2024
Featured image created using DALL-E, chart from TradingView