Ethereum Issuance Massively Dropped by 98.4%, What’s Next?
After the implementation of the merge update and the increase in network activity, the price of Ethereum has fallen by more than 98%. Under the PoW mechanism, more than $500 million worth of ETH would have been in the market in the same period.
Since the implementation of the major update, only 6,500 ETH has been spent on the network. At the current price level, it’s worth around $8.5 million. Technically, such a low entry into a nearly $10 billion asset makes new sales volume non-existent in the market.
According to tracking service ultrasound. Money Ethereum, after the merge update, the network has passed its peak in output and is slowly becoming deflationary as output turns negative, with most of the coins being burned instead of being distributed among miners.
Deflation is not a panacea
Deflation periods for Ethereum investors are nothing they have never experienced. Negative issuance has happened many times for ETH, especially during the NFT and DeFi industry boom when network load was close to 100%.
However, the lack of new coins on the market is nothing that drastically changes the performance of the second largest cryptocurrency on the market. Network usage and income seem to be the only factors that can lead to strong rallies in the market, at least at this point. Prolonged deflation can have a positive impact on Ethereum’s market value, but to capitalize on this, developers should offer users something that will attract new investment into ‘s decentralized industry.
At press time, Ethereum is trading at $1,327, hovering in the consolidation channel.