While Ethereum has not been very consistent with its bullish trajectory in recent weeks, its circulating supply has done the opposite. According to data From Ultrasoundmoney, the circulating supply of ETH has skyrocketed to over 120.72 million ETH as of today.
Although this increase in supply is not directly negative for ETHstill marks a notable shift in network dynamics, fueled in large part by the adoption of Ethereum’s proof-of-stake (PoS) model.
Increased supply, how and why?
The increase in Ethereum’s total supply to 120.72 million ETH, as shown in Ultrasound.money data, reflects increased network activity over the past month.
In this period alone, Ethereum saw the issuance of 77,102 ETH, while 19,402 ETH were removed from circulation through a burning mechanism introduced in the network’s recent London Hard Fork.
The net increase of approximately 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 rewards for staking.
As for the likely reasons for the increased supply, around 33.9 million ETH are currently staked on the network, generating substantial rewards in newly issued ETH.
This large-scale staking appears to be contributing significantly to the increase in the total supply of Ethereum. Furthermore, the staking process has been further amplified by the re-staking trend, where participants reinvest their staking rewards back into the network.
This rescaling cycle creates a compounding effect on the issuance of new ETH, increasing supply even as the network moves into a “seemingly” inflationary trajectory after the initial deflationary expectations set by the ETH burning mechanism.
Ethereum Market Performance
So far, Ethereum appears to be seeing a gradual price increasefrom $2,500 last Thursday to currently trading at $2,652 at the time of writing, marking a 9.3% increase in the last 7 days.
This increase in value coincides with that of ETH market capitalization assessmentwhich has seen an increase of nearly $20 billion over the same period. Despite this increase, ETH’s daily trading volume has seen the opposite.
Notably, over the past week, this metric has fallen from over $21 billion to currently sitting at $12.8 billion. Regardless, many analysts in the crypto space remain bullish on Ethereum.
Earlier today, a renowned analyst known as the crypto titan at X set out a $3,000 target for ETH. According to the analyst, ETH looks poised for a major rally as a “CME futures GAP” towards the upside remains unfilled.
#Altcoins #Ethereal $3,000 target #ETH looks set for a change, 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 from TradingView