The Merge has radically transformed Ethereum: the scarcity of ETH cryptos has reached a peak in the 18 months since the merger. This situation stems from a deflationary trend, driven by major players such as Uniswap, Tether and OpenSea. What influence could this burning scarcity have on the price of Ethereum?
Ethereum deflationary since the merger
Since the Merge in September 2022, Ethereum is making a major shift towards a deflationary model, transforming the economic dynamics of the blockchain. The data of Ultrasound Money reveal a notable reduction in total supply, with 309,663 ETH deliberately removed from circulation. This represents a value of $686.2 million at the current Ethereum price.
This decrease in supply is mainly due to the destruction of 1,195,238 ETH, which represents a value of $2.65 billion. This signifies a significant change from the old inflationary model where new ETH was constantly being created.
A look at the main contributors to this deflation reveals key players such as Uniswap, Tether and OpenSea.
First, Uniswap emerges as a leader, burning $543.8 million, with its high trading volume in the DeFi sector. Then, Tether, symbol of stable transactions. Finally, OpenSea highlights the persistence of NFT transactions even during bear markets.
This deflationary trend suggests that Ethereum is becoming more rare and valuable. Which equals good news! Especially for investors looking for value.
Positive impacts for the network and investors?
Looking to the future, the transition to a deflationary Ethereum offers intriguing prospects.
Indeed, the emphasis on scarcity could generate increased interest from investors seeking stable value. Particularly in a context where fiat currencies are subject to inflation. However, it is crucial to remain vigilant in the face of volatility in the crypto market. A rise in demand could be a major catalyst for a rise in the value of Ethereum.
At the same time, regulatory changes could strongly influence the trajectory of the second largest crypto. Initiatives from regulatory authorities, such as those of the SEC in the United States, could reshape the crypto environment.
Although Ethereum crypto deflation offers attractive promise, investors will need to be savvy. In any case, the constant decrease in the total supply of ETH in circulation supports the idea of an increase in the value of the crypto in the long term.
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