7,968 ETH Worth $16M Was Just Burned
Portfolio Pulse from Benzinga Insights
On Wednesday, 7,968.73 Ether (ETH) valued at $16M was burned, permanently removing it from circulation. This is a result of the EIP-1159 upgrade implemented on August 5th, 2021, which introduced a variable base fee for transactions that is burned. The current issuance rate of new Ether is 4% per year, expected to drop to 0.5-1% with Ethereum 2.0, potentially making ETH deflationary. The net annualized issuance rate for Ether was -9.16% yesterday, according to Glassnode.
November 23, 2023 | 6:00 pm
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The burning of 7,968.73 ETH could contribute to a deflationary pressure on Ethereum, as the supply is reduced. With the transition to Ethereum 2.0, the issuance rate is expected to decrease further, which may support a price increase if demand remains constant or grows.
The burning of Ether directly affects the supply of the cryptocurrency, creating a deflationary effect. As the article suggests that the burn rate may exceed the issuance rate after the Ethereum 2.0 upgrade, this could lead to a scarcity of ETH, driving up its price in the short term. The confidence level is not at 100 because the cryptocurrency market is highly volatile and influenced by many external factors.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100