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Since The Merge, a term that connotes the transition of Ether from the Proof-of-work (PoW) consensus mechanism to the Proof-of-stake (PoS), the volume of Ethereum (ETH) in circulation has dropped to an all-time low. As of February 1st which is almost 140 days after The Merge, Ether’s total circulating supply stood at approximately 120.5 million tokens.
Following The Merge in September 2022, there has been a significant drop in the total net issuance of ETH which many perceive may be due to the rally in Bitcoin (BTC) price and increasing equity markets. It has been discovered that many crypto investors are more interested in acquiring tokens that pose higher risks and are readily only available on-chain.
Noteworthy, the circulating supply of ETH is a significant factor that traders and analysts alike consider in the process of analyzing Ethereum prices. It is believed that the lesser the token in circulation, the better the price of the token.
Also, a decreasing supply can be attributed to the number of users trying to initiate a new transaction which eventually translates to the amount of demand on the network. This results in a rise in the average ETH burned for each transaction, hence, a decrease in Ether circulating supply. Just like BTC, ETH price has also been on an uptrend since the beginning of this year.
Ethereum Transaction Activities Recovers
According to Dune Analytics, since January the cost of transactions on Ethereum has been increasing. At a point, it reached the levels where BTC and ETH prices were at their all-time high in the third quarter of 2021.
Similarly, Non-fungible token (NFT) activities on the Ethereum protocol have been on a slight recovery. For now, it has not reached the all-time high of 2021 but it indicates the revitalization of on-chain activities.
Meanwhile, Bitcoin price is picking up stealthily much to the disappointment of BTC critics like Jim Cramer, CNBC Mad Money host who asked investors to sell off their holdings. So far, the coin has recovered up to 40% of its value after dropping more than 70% from its all-time high and is currently at almost $24,000 at the time of this writing.
The post Ether Circulating Supply Hit All-Time Low Post-The Merge appeared first on Blockchain, Crypto and Stock News.
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