Here is why strong post-Merge fundamentals could benefit Ethereum price
The shift of the Ethereum (ETH) blockchain to a proof-of-stake (PoS) protocol opened new opportunities for developers and investors to explore, including the burning of Ether. Now, Ethereum PoS transactions are validated through staking rather than mining.
Staking impacts the supply and price dynamics of Ether in ways that are different from mining. Staking is expected to create deflationary pressure on Ether as opposed to mining that induces inflationary pressure.
The increase in the total amount of funds locked in Ethereum contracts could also push its price up in the long term. This is because it affects one of the fundamental forces that determine its price, supply.
The percentage of newly issued Ether versus burned Ether has increased by 1,164.06 ETH since the merge. This means since the merge, almost all new minted supply has been burnt through the new PoS Ethereum burn mechanism which is expected to turn deflationary when the network sees an uptick in use.
According to Bitwise analyst Anais Rachel, “all the ETH issued since The Merge will have been taken out of circulation by the end of this week.”
1/ It's likely that all ETH issued since The Merge will have been taken out of circulation by the end of this week pic.twitter.com/WqRASUwi4i
While the graph covers the 43 days since the Ethereum merge, the tokenomics are set up to turn Ethereum deflationary. Ultrasound Money shows that the peak.
The reduction is attributable to Ethereum’s movement from PoW to PoS. Total supply difference shows Ethereum is still inflationary with positive 1,376 ETH minted since the merge.
Ankit Bhatia, CEO of the Sapien Network, explains how staking impacts supply. Bhatia told Cointelegraph:
There is evidence of an increase in locked
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