Ethereum

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You can also read this news on COINTURK NEWS: <a href="https://en.coin-turk.com/ethereum-faces-supply-and-inflation-challenges-2/" data-wpel-link="internal">Ethereum Faces Supply and Inflation Challenges</a> 
The transition to PoS led to a significant rise in ETH, but the trend was not favorable. Despite entering an upward trend, ETH’s price faced changes on the supply side and remains far from its previous levels when BTC was at $60,000. Is the supply increasing to a concerning degree? 
<h2 style="text-align: justify" id="ethereum-supply-and-inflation">Ethereum Supply and Inflation</h2> 
ETH supply is unlimited. Unlike many cryptocurrencies that have a cap like BTC’s 21 million, ETH has mechanisms that determine annual token inflation. If token demand exceeds annual inflation and <a href="https://finance.coin-turk.com/" data-wpel-link="exclude">long-term investors</a> are sufficient, the price of an <a href="https://en.coin-turk.com/cryptocurrency-titans-leader-divests-in-altcoin-retains-majority-of-the-largest/" data-wpel-link="internal">altcoin</a> with unlimited supply can rise. 
With the PoS transition, ETH supply did not become limited, but miner rewards were eliminated, and more reasonable staker rewards were introduced. This led to a burn of a portion of the income from transaction fees, causing supply to decrease when network activity was strong and transaction fees were high. Thus, we began to see negative inflation. 
Now, this has changed. According to Ultrasoundmoney, ETH supply has risen to 120.28 million ETH. In the last 30 days, 77,091 ETH entered circulation. The current annual inflation has returned to positive levels, showing an inflationary trend at 0.583%. 
<img loading="lazy" loading="lazy" decoding="async" class="wp-image-380260 aligncenter" src="https://coin-turk.com/wp-content/uploads/2024/08/ETH-Arz.png" alt="" width="969" height="502"> 
The 30-day burn was 19,438 ETH, so when we subtract this from the issuance figure above, the net excess in circulation was 57,653 ETH. Although the burn mechanism introduced with the London Hard Fork created a deflationary environment for a while, subsequent updates that reduced transaction fees and made Layer2 solutions about 90% cheaper changed things. 
<h2 style="text-align: justify" id="what-will-happen-to-ethereum-eth">What Will Happen to Ethereum (ETH)?</h2> 
The inflationary environment seems likely to continue for ETH. Increased interest in restaking platforms like EigenLayer, along with rewards, accelerates the growth rate of supply. In just one week, EigenLayer’s total locked value increased by 11%. This and the growing interest in other platforms indicate that contributions to the inflationary environment will continue. 
The biggest advantage here arises from the rapid strengthening of demand through the ETH ETF channel. Since ETH issuers cannot stake and pass on this income to their customers, they cannot contribute to the inflationary environment. Nevertheless, even with inflation between 1% and 5%, in the worst-case medium-term scenario, the <a>price</a> of ETH should not be massively negatively affected. Many cryptocurrencies have grown for years despite double-digit inflation, and considering ETF support for ETH, we should not see significant negative results in the medium term with increasing demand in secondary markets. 
Of course, stories that deflation supports the price and that there could be a long-term supply shortage have evaporated in light of all the above details. This can be considered a loss of profit. 
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Ethereum Faces Supply and Inflation Challenges

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