Ethereum Upgrade Sparks Ether Supply Drop
Ethereum's recent upgrade, Dencun, activated on March 13, has triggered a significant decline in ether supply.
Reports suggest this reduction is the most notable since August 2022, following Ethereum’s transition from proof-of-work to proof-of-stake, known as The Merge.
The rate of decline in ether supply has accelerated, notably since May 2023. Over the last month, data indicates a 0.872% yearly decline, with a post-Merge rate of 0.246%.
Julio Moreno, head of research at CryptoQuant, attributed this decline to heightened activity on the Ethereum network, resulting in increased transaction fees and subsequent fee burning.
Since The Merge, over 1.56 million ether has been burnt, while issuance stands at less than 1.12 million ether. This net decrease of over 446,000 ether amounts to nearly $1.62 billion at current prices.
While Solana’s network activity has drawn attention, Ethereum’s seven-day moving average of transactions nears its 12-month high, with 1.26 million transactions recorded recently.
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Moreno emphasized the impact of high transaction activity, leading to fee spikes, increased burning, and a reduction in ether supply.
Additionally, Ethereum’s network metrics show promising trends. Active addresses have reached year-to-date and 12-month highs, with over 540,000 active addresses recorded. New addresses are also at similar highs, with over 120,000 new addresses identified recently. On-chain volume has surged to new highs, surpassing $7 billion, according to data from The Block.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
