While Ethereum’s prices regain bullish momentum, its issuance or supply has fallen by 23,948 ETH worth nearly $40 million since the Merge, data from UltraSound.Money showed.
The world no 2 crypto has a current circulating supply of 120.49 million. Moreover, the supply growth is negative 0.7% per year with 1,556K ETH burnt on a daily basis.
The last 6 months post-merge have seen a constant decline in exchange supply. For those new, the Eth network transitioned from a proof-of-work [PoW] to a proof-of-stake [PoS] network in an event called the Merge in Sept 2022.
As per a recent report shared by leading on-chain data analytics firm Santiment, the amount of available ETH sitting on exchanges has registered a steep decline.
In fact, ETH in exchanges has shrunk by 37% which technically indicates a bullish movement on the coin’s value as there is less ETH available to trade or sell.
There were a total of 19.12 million ETH, valued at $31.3 billion, on exchanges before the September merging. In the second week of February, there were 13.36 million ETH, valued at $19.7 billion.
Besides the constant depletion in ETH supply held on exchanges, the asset’s overall market supply has also tanked since it turned deflationary post-London upgrade. The deflationary model is based on the fee-burning mechanism made available by Ethereum Improvement Proposal [EIP]-1559.
With the Shanghai upgrade soon, a sizable percentage of the ETH supply has shifted into self-custody, and many traders also favor staking.
Ethereum’s Shanghai Upgrade
March will see the launch of Shanghai, the next Ethereum update. Stakeholders and validators will be able to remove their holdings from the Beacon Chain during the hard fork, which will also incorporate more suggestions for network improvements.
At present, 16 million ETH, or 14% of the total supply, is staked on the Beacon Chain, amounting to approximately $25 billion at current prices — a considerable amount that will gradually become liquid after the Shanghai hard fork.
Ethereum’s price briefly touched $1,700 before retracing back to trade at $1681, at press time.
The second-largest cryptocurrency by market capitalization has increased by more than 7% in the last 24 hours as it approaches a multi-month high, but strong resistance is present at this point.