Ether Supply Dips to All-Time Low Post The Merge: Details

Today, the total number of tokens in circulation for Ethereum dropped to a post-Merge low of roughly 120.5 million.

Ethereum shifted from proof-of-work to proof-of-stake following The Merge, one of the major technological shifts in the network’s history that profoundly altered its economics. Additionally, the total net issuance of Ether was drastically reduced.

Since traders frequently react by purchasing higher-risk tokens that are only available on-chain, the declining supply may be related to the growing price of Bitcoin and the soaring equity markets. The average amount of ether burned from each transaction increases as a result of increased network demand, or the number of users attempting to create new transactions, which further reduces supply.

Since the start of 2023, the overall cost of transactions on Ethereum has been rising. In the third quarter of 2021, when Bitcoin and Ether prices were substantially higher, they temporarily reached those levels.

According to Dune Analytics, NFT activity on Ethereum has also experienced a little uptick. This activity is another sign that on-chain activity is returning, even though it is not quite as high as it was in 2021 when volume reached an all-time high.

Many analysts and traders consider the Ether circulating supply to be a crucial fundamental factor when examining the price of ether because they believe that fewer tokens in circulation will increase the price.