6,392 ETH Worth $14M Was Just Burned
Portfolio Pulse from Benzinga Insights
On Thursday, 6,392.42 Ether (ETH) valued at approximately $14.67 million 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% annually, but with the upcoming Ethereum 2.0 upgrade, it is expected to drop to 0.5-1%, potentially making ETH a deflationary currency. The net annualized issuance rate for Ether was -6.49% yesterday, according to Glassnode.
December 29, 2023 | 6:00 pm
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POSITIVE IMPACT
6,392.42 Ether worth $14.67M was burned, potentially leading to a deflationary scenario for ETH as the Ethereum 2.0 upgrade approaches. The burn rate may exceed the issuance rate, which could positively impact the value of ETH.
The burning of Ether reduces the overall supply, which can lead to an increase in the value of the remaining ETH if demand remains constant or increases. The transition to Ethereum 2.0 and a potential decrease in new Ether issuance to 0.5-1% per year could further exacerbate this effect, making ETH a deflationary asset. This is generally seen as a positive development for the price of an asset, hence the positive score.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100