MadsEberhardt_Steno
Where's the Ether?
Ethereum is a scarce asset. The second-largest cryptocurrency has turned deflationary upon the Ethereum merge on the 15th of September 2022, as more Ether is burned through transaction fees than what is issued to Ethereum stakers. This is fairly groundbreaking in the crypto world, as almost all other cryptocurrencies, including Bitcoin, tend to dilute their holders through inflation, often favoring miners over stakers. Since the merge, the total supply of Ethereum has decreased by slightly more than 340,000 Ether, notably, this decrease has occurred even during a period when the broader crypto market has been in a bear market. At the same time, over 29 million Ether are staked, and a further 15 million is locked in various decentralized protocols, representing a significant portion of the total circulating supply of 120.2 million Ether. While these assets can be unlocked, some immediately and others in the foreseeable future, the majority of these holders, especially stakers, are likely to be long-term holders. The balance of Ethereum in exchange reserves continues to decline. It has reached its lowest point since mid-2018, partly due to an increasing amount of Ether being locked in protocols, staked, and utilized for transaction fees. This suggests a decreasing likelihood of Ether being sold. It is only a matter of time before the market recognizes the scarcity of Ethereum on par with that of Bitcoin, with Bitcoin expected to take center stage in April, during which the fourth Bitcoin halving is estimated to occur.