Understanding Ethereum’s Supply Dynamics Post-Merge
Benjamin Cowen, the founder of Into The Cryptoverse, has recently highlighted a critical issue regarding Ethereum’s supply. According to Cowen, there’s a looming risk of Ethereum reverting to its pre-Merge supply levels. “If the supply of ETH keeps increasing by ~60k/month like it has been since April, then by Dec the supply will be back to what it was at the merge,” Cowen explained in a recent X post.
The Ethereum network underwent a significant transformation with the Merge in September 2022, transitioning to a proof-of-stake consensus model. This shift was expected to introduce a deflationary mechanism to the network, reducing the overall supply of ETH. Indeed, data indicated a drop of approximately 455,000 ETH by April 2024. However, the trend has seen a reversal over the past three months, with an increase of around 150,000 ETH.
Cowen’s analysis suggests that if this rate of increase continues, Ethereum could see its supply inflate back to levels observed before the Merge. This potential increase in supply could have various implications for the market dynamics and pricing of ETH.
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Price Predictions and Market Movements
Despite the potential for a short-term decline in Ether’s price within the next “3-6 months,” Cowen remains optimistic about the long-term prospects, suggesting that in 1.5 years, the price of Ether will “likely be higher” than its current levels. As of now, Ether is trading at $3,507, according to CoinMarketCap data.
Looking Ahead
For those keen on exploring further about Ethereum’s journey and its impact on the blockchain ecosystem, the Decade after Ethereum ICO: Blockchain forensics end double-spending debate offers an in-depth look.
As the crypto community waits to see how these new ETFs will perform, the broader implications for the Ethereum network and its native token remain a hot topic for analysts and investors alike.
