Although this increase in supply is not straightforwardly negative for ETH, it still marks a notable shift in the network’s dynamics, fuelled largely by adopting Ethereum’s proof-of-stake (PoS) model.
Supply Increase, How And Why?
The surge in Ethereum’s total supply to 120.72 million ETH, as shown in the data from Ultrasound.money, reflects the network’s increasing activity over the past month.Concerning the likely reasons behind the increase in supply, about 33.9 million ETH are currently staked in the network, generating substantial rewards in newly issued 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 restaking, where participants reinvest their staking rewards into the network. This restaking cycle creates a compounding effect on the issuance of new ETH, boosting the supply even as the network moves to a “seemingly” inflationary trajectory after the initial deflationary expectations set by the ETH burn mechanism.Ethereum Market Performance
So far, Ethereum appears to be seeing a gradual price increase, from $2,500 last Thursday to currently trading at $2,652 at the time of writing, marking a 9.3% increase in the past 7 days.
This surge in value coincides with ETH’s market cap valuation, which saw a spike of nearly $20 billion over the same period. Despite this rise, ETH’s daily trading volume has seen the opposite.
Particularly, over the past week, this metric has plunged from over $21 billion to currently sitting at $12.8 billion. Regardless of this, many analysts in the crypto space remain bullish on Ethereum.Earlier today, a renowned analyst known as the titan of crypto on X has set a $3,000 target for ETH. According to the analyst, ETH looks ready for a major rally as a “CME futures GAP” towards the upside remains unfilled.
$3,000 Target 🎯 looks poised for a move, with a CME futures GAP above still waiting to get filled. — Titan of Crypto (@Washigorira)Featured image created with DALL-E, Chart from TradingView