Ethereum, one of the leading cryptocurrencies, has experienced a notable surge in its token supply, with an increase of approximately 10,000 ETH recorded this week, according to data sourced from Ultrasound.money. This upswing, however, has contributed to a 0.43% annual inflation rate, primarily attributed to a decreased burn rate of 6,140 ETH, juxtaposed with a heightened issuance of 16,100 ETH. This development unfolds within the context of a broader market weakness in the realm of altcoins and a somewhat underwhelming performance of Ethereum futures exchange-traded funds (ETFs).
As of the latest data, the price of Ethereum continues its persistent descent, currently hovering at $1,570, with a 24-hour trading volume totaling $9.6 billion. This downward trajectory is being exacerbated by significant selling pressure exerted by large-scale investors and the Ethereum Foundation’s recent conversion of $2.74 million worth of ETH into USDC, achieved through Uniswap V3.
Additionally, Ethereum has observed year-to-date outflows exceeding a substantial $100 million, despite recent reports of modest inflows amounting to approximately $10 million, as disclosed in CoinShares’ Digital Asset Fund Flows Weekly Report. Notably, crypto analyst Ali Martinez has drawn attention to the consistent selling activity undertaken by crypto whales since February, which has resulted in the redistribution or outright sale of more than 5 million ETH, showing no immediate signs of a reversal in this trend.
In spite of the prevailing market conditions, there remains a potential ray of hope for Ethereum investors. If inflows regain momentum, a price rebound for Ethereum could be anticipated. Nevertheless, the current state of affairs underscores the highly volatile nature of cryptocurrency markets and highlights the significant influence that large-scale investor activity can exert on the valuation of digital tokens.
