đ€Ż Ethereum Price Wobbles As Inflation Sees 210,000 Added To Circulation
Recent market dynamics have again brought Ethereumâs supply into the spotlight and reiterated concerns about its inflationary trend. Earlier this year, Ethereum reached a significant milestone in its circulating supply, surpassing 120 million ETH and the number continues to grow.
Unlike other prominent cryptocurrencies such as Bitcoin and Cardano, which have fixed supply caps, Ethereum was designed with an unlimited supply of tokens. This fundamental difference makes Ethereum an inherently inflationary asset, one that has a continuously increasing supply.
On-chain data from Ultrasound.money has shed light on the growing supply of ETH in recent months amidst notable price fluctuations for the cryptocurrency. The most recent data indicates that the total supply of Ethereum has now reached approximately 120.28 million ETH.
Over the past seven days alone, 16,039 new ETH tokens have been issued. This pace of issuance corresponds to an annual inflation rate of 0.70%. Interestingly, this data shows that 243,886 ETH has been created in the past four months since the Dencan upgrade in March.
đž What Does This Mean For Ethereum?
Ethereumâs inflationary mechanism is mostly counteracted by burning tokens. This burn mechanism was introduced as part of Ethereumâs London Hard Fork in order to introduce a deflationary mechanism to Ethereum. This mechanism aims to reduce the overall supply of ETH by burning a portion of the transaction fees, thereby introducing a deflationary counterbalance.
However, data from Ultrasound.money shows the burns are currently lagging behind issuance, and Ethereum is now on an inflationary trajectory. Particularly, 2,028 ETH were burned in the past seven days, compared to 18,075 ETH issued in the same timeframe. Such a sustained uptrend in supply growth could cause downward pressure on the price of ETH in the case of a decline in demand.