Ethereum

bullish

EigenLayer

You can also read this news on COINTURK NEWS: <a href="https://en.coin-turk.com/ethereum-supply-faces-inflationary-trends/" data-wpel-link="internal">Ethereum Supply Faces Inflationary Trends</a> 
The transition to PoS led to a major bullish narrative for ETH, but the trend was not suitable. Although we entered a bullish trend, the ETH price faced changes on the supply side and remained far from its previous levels when BTC was at $60,000 despite ETH approval. So, 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 mechanisms similar to BTC’s 21 million limit, 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/strategic-investment-in-theta-labs-by-dwf-labs/" 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 caused the supply to melt when network activity was strong and transaction fees were high, as a portion of the income from transaction fees was burned. Thus, we began to see negative inflation. 
Now, this has changed. According to Ultrasoundmoney <a href="https://newslinker.co/how-does-artificial-intelligence-work/" target="_blank" rel="noopener" data-wpel-link="exclude">data</a>, 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 and started to show 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 surplus in circulation was 57,653 ETH. Although the burn mechanism introduced with the London Hard Fork created a deflationary environment for a while, the update that reduced transaction fees and Layer2 solutions by about 90% 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 to continue for ETH. Especially the increasing interest in restaking platforms like EigenLayer accelerates the growth rate of supply with rewards. In just one week, EigenLayer’s total locked value increased by 11%. This and the increasing interest in other platforms indicate that the contribution to the inflationary environment will continue. 
The biggest advantage here arises from the rapid strengthening of demand in the ETH ETF channel. ETH issuers cannot contribute to the inflationary environment as they cannot stake and transfer this income to their customers. Still, even in the worst-case scenario with 1% to 5% inflation, the sustainability of ETH price should not be massively negatively affected. Many cryptocurrencies have grown for years despite double-digit inflation, and considering the ETF support for ETH, we should not see major negative results in the medium term with increasing demand in secondary markets. 
Of course, the narratives that deflation supports the price and that there could be a long-term supply shortage have evaporated in light of all these details. This can be considered a loss of profit. 
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Ethereum Supply Faces Inflationary Trends

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