MAC_D
ETH Why It Has High Potential for Growth Despite Increasing Total Supply and Decreasing Staking Ratio
Recently, #Ethereum's 'ultra sound money' narrative has been weakening. This is due to the total supply reaching an all-time high and a 1% decrease in the staking ratio since last November. Despite these negative supply-side factors, Ethereum's potential for an upward trend remains high. First, Ethereum's current realized price is around $2.2k, which is significantly undervalued considering the current price of $2.6k. This represents the average purchase price of all Ethereum holders and serves as a meaningful price support level. Calculating MVRV based on the realized price yields a value slightly above 1, indicating that Ethereum is in a highly undervalued position. Second, the number of permanent holders who have accumulated Ethereum and never sold is rapidly increasing. This trend is similar to that of Bitcoin's permanent holders. While some whale investors may have exited during this downturn, it can be interpreted that permanent holders have absorbed their selling pressure. Third, selling pressure in the futures market is decreasing. The net market price trading volume chart shows that the selling position market price trading volume, which peaked when Ethereum rose to $4k in November, is now lower than before despite the price plunge. This indicates that although the price has fallen, selling pressure has decreased, suggesting a relative inflow of buying power. Fourth, institutional investors are aggressively accumulating Ethereum. During this downturn, companies like BlackRock (100,535 ETH, worth $276 million), Cumberland (62,381 ETH, worth about $174 million), WLFI, and CoinShares have been actively buying. This aggressive accumulation is acting as a factor offsetting downward pressure. In conclusion, despite the increase in total supply and decrease in staking ratio on the supply side, there are many positive factors on the demand side. While Ethereum is likely to move sideways for a few months until macroeconomic uncertainties are resolved, its poten