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Ethereum Deflationary Value Reached $16 Million in January

2 mins
Updated by Ali Martinez
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In Brief

  • The decrease in the supply of ETH is attracting attention, with total supply standing at 120,515,722 units.
  • Possible causes of the trend include increased demand or economic factors such as long-term holding.
  • Despite ETH price performance, the crypto community remains optimistic about the future of this blockchain.
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Ethereum has seen a significant drop in its supply over the past month, with a net decrease of 10,145.72 ETH and a deflationary value of approximately $16 million.

A deflationary network can have implications for the cryptocurrency’s value, as a decrease in supply can increase demand, driving up the price

More ETH Burned Than Minted

Deflation in the context of Ethereum refers to a decrease in the overall supply of ETH tokens. This occurs when the amount of ETH being removed from circulation, through processes like token burning, is greater than the amount being created newly minted tokens awarded to validators.

The recent net decrease in supply of 10,145.72 ETH marks a continuation of a trend that has been ongoing for some time, as the annual growth rate of the Ethereum has dropped to -0.012%, according to data from Ultrasound Money.

Ethereum Circulating Supply
Source: Ultrasound Money

This development has sparked interest among experts and investors alike, who are now exploring the potential causes and implications of this trend. Some believe that the decrease in the supply of ETH could be a sign of increased demand for the currency, as investors seek to acquire a larger stake in this valuable asset.

Others argue that the trend may be driven by economic factors, such as a rise in the number of people who are holding their ETH for the long term, rather than trading it on the market. Regardless of the cause, the decrease in the supply of Ethereum has attracted significant attention, as the current total supply of the currency stands at 120,515,722 ETH.

Ethereum Price Hangs by a Thread

The declining token supply has also been accompanied by a drop in the overall market value of the currency, which has fallen 67.50% from its all-time high of $4,877 to approximately $1,570, at the time of writing.

Ethereum ETH Price
Source: TradingView

The significant dip in the price of Ethereum could extend as market analysts anticipate that the upcoming Shanghai upgrade may encourage holders to rush to exchanges to liquidate around 1 million ETH from staking rewards.

Despite these recent developments, the Ethereum community remains optimistic about the future of the currency.

Many experts believe that the underlying technology behind ETH will continue to evolve and drive new innovations in the crypto space. And developers continue working on improving the scalability and security of the network, which is expected to drive further growth in the coming years.

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Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCrypto’s editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.

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Ali Martinez
Ali Martinez is the Global Head of News at BeInCrypto, specializing in market analysis, emerging trends in the crypto industry, Bitcoin’s four-year cycle, and macroeconomic developments. Previously, he covered the altcoins market for Crypto Briefing, CryptoSlate, CCN.com, and NewsBTC. His reporting focused on the ICO boom, Ethereum's evolution, Bitcoin halvings, and network upgrades like hard forks and soft forks, emphasizing the impact on digital asset valuations. At Binance and FXStreet,...
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