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You can also read this news on COINTURK NEWS: <a href="https://en.coin-turk.com/ethereum-supply-and-inflation-affect-eth-price/" data-wpel-link="internal" rel="noopener noreferrer nofollow">Ethereum Supply and Inflation Affect ETH Price</a> 
The transition to PoS resulted in a significant rise for ETH, but the trend was not favorable. Despite entering an upward trend, the ETH price faced changes in supply and remained far from its previous levels when BTC was at $60,000. 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 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" rel="noopener noreferrer nofollow">long-term investors</a> are sufficient, the price of an <a href="https://en.coin-turk.com/dwf-labs-purchases-2-5-million-axl-tokens-fuelling-interest-in-crypto-market/" data-wpel-link="internal" rel="noopener noreferrer nofollow">altcoin</a> with unlimited supply can rise.
With the transition to PoS, ETH supply did not become limited, but miner rewards were eliminated, and more reasonable staker rewards were introduced. This led to a reduction in supply when network activity was strong and transaction fees were high, as a portion of the revenue from transaction fees was burned. 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 amounted to 19,438 ETH, resulting in a net excess of 57,653 ETH in circulation after subtracting this from the issuance figure above. The burn mechanism introduced with the London Hard Fork created a deflationary environment for a while, but subsequent updates that reduced transaction fees and made Layer2 solutions about 90% cheaper changed the situation.
<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. Increased interest in restaking platforms like EigenLayer accelerates the growth rate of supply along with rewards. In just one week, EigenLayer’s total locked value increased by 11%. This and the growing 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 through the ETH ETF channel. ETH issuers cannot stake and transfer this income to their customers, thus not contributing to the inflationary environment. Nevertheless, 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 ETF support for ETH, we should not see significant negative results in the medium term with increasing demand in secondary markets.
Of course, stories about deflation supporting the price and potential long-term supply shortages have evaporated in light of all these details. This can be considered a loss of profit.
<h5>The post first appeared on COINTURK NEWS: <a href="https://en.coin-turk.com/ethereum-supply-and-inflation-affect-eth-price/" data-wpel-link="internal" rel="noopener noreferrer nofollow">Ethereum Supply and Inflation Affect ETH Price</a></h5>
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Ethereum Supply and Inflation Affect ETH Price

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