While Ethereum hasn’t been entirely consistent with its bullish trajectory in recent weeks, its circulating supply has done the opposite. According to data from Ultrasoundmoney, ETH’s circulating supply has skyrocketed to over 120.72 million ETH as of today.
While this increase in supply is not directly negative for ETH, it nonetheless marks a notable shift in network dynamics, fueled in large part by the adoption of Ethereum’s proof-of-stake (PoS) model.
Increase in supply, how and why?
The increase in Ethereum’s total supply to 120.72 million ETH, as shown by data from Ultrasound.money, reflects the increasing activity on the network over the past month.
During this period alone, Ethereum saw the issuance of 77,102 ETH, while 19,402 ETH were removed from circulation via a burning mechanism introduced during 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 7 days.
Notably, with Ethereum’s transition from the Proof-of-Work (PoW) model to the PoS model, the network not only achieved a major shift in security but also increased the rewards for participation.
Regarding the probable reasons behind the supply increase, around 33.9 million ETH are currently staked in the network, generating substantial rewards in newly minted ETH.
This large-scale staking appears to be contributing significantly to the increase in Ethereum’s total supply. Additionally, the staking process has been further amplified by the trend of resttaking, where participants reinvest their staking rewards back into the network.
This re-staking cycle creates a cumulative effect on the issuance of new ETH, increasing the supply even as the network moves towards an “apparently” inflationary trajectory after the initial deflationary expectations set by the ETH burn mechanism.
Ethereum Market Performance
So far, Ethereum appears to be experiencing a gradual price increase, rising from $2,500 last Thursday to $2,652 at the time of writing, marking a 9.3% increase over the past 7 days.
This increase in value coincides with the valuation of ETH’s market capitalization, which has increased by nearly $20 billion over the same period. Despite this increase, ETH’s daily trading volume has seen the opposite.
In particular, over the past week, this value has fallen from more than $21 billion to $12.8 billion currently. Despite this, many analysts in the cryptocurrency sector remain optimistic about Ethereum.
Earlier today, a renowned analyst known as the crypto titan on X set a $3,000 target for ETH. According to the analyst, ETH looks set for a major rally as a “CME futures gap” to the upside remains incomplete.
#Altcoins #Ethereum $3,000 Goal
#ETH looks set to move, with a CME futures gap above still waiting to be filled. pic.twitter.com/6lC2d6lgQ6
– Crypto Titan (@Washigorira) August 15, 2024
Featured image created with DALL-E, chart by TradingView
