- ETH ($2,691.42) supply has surged to $120.5M tokens, climbing back to pre-Merge levels.
- Analyst believe this could extend ETH’s price underperformance against BTC ($96,260.00).
Ethereum [ETH] supply is back to pre-Merge levels, raising questions about the potential impact on the altcoin price.
For context, The Merge (the transition from Proof-of-Work, PoW, to Proof-of-Stake, PoS, in September 2022) had several key goals.
These included energy efficiency, reduced ETH issuance (supply), and a foundation for future scalability upgrades.
However, the recent shift in ETH supply dynamics, over 120.5 million ETH, indicates that one of the key goals is yet to be achieved.
Will ETH further lag behind BTC?
According to UltraSound Money data, over 46K ETH were added to the supply over the past 30 days alone. Supply growth has increased since the blob upgrade in Q1 2024.
The update made L2 transactions cheaper and transferred demand from base layer L1 to L2s, reducing the amount of burnt ETH.
As such, the ETH deflationary efforts reversed with the blobs update, and it took less than a year for the supply to grow back to pre-Merge levels.
