Ethereum’s daily issuance rate fell below Bitcoin’s for the first time this week, according to a blockchain researcher.
Lucas Outumuro, head of research at blockchain intelligence firm IntoTheBlock, says Ethereum’s (ETH) net inflation fell to an annualized rate of 1.11% compared to Bitcoin’s annualized rate of 1.75% during the middle of this week.
1/ For the first time $ETH‘s daily issuance was lower than $BTC‘s
ETH net inflation: 3574 ETH (1.11% annualized)
BTC net inflation: 900 BTC (1.75% annualized)
A short thread on Ethereum’s recent surge in activity and potential implications of its decreasing inflation 👇 pic.twitter.com/IBT9Vf3MNo
— Lucas Outumuro (@LucasOutumuro) August 27, 2021
Outumuro also says that Ethereum’s falling issuance rate could bestow a monetary premium on the second-largest cryptocurrency by market cap, potentially allowing the asset to transmit value over time without users having to worry about the possible loss of purchasing power.
“Ether’s decreasing issuance raises questions about how it is valued. Previously closer to ‘digital oil’ ETH’s value moved in tandem with its usage. Now that its issuance is provably lower (and potentially deflationary), it is likely to develop a monetary premium like BTC.”
The blockchain researcher adds that the non-fungible token (NFT) craze contributed to Ethereum’s falling issuance as it increased the fees generated, a portion of which are burnt.
“The recent surge in NFT activity has significantly increased Ethereum fees and the amount of ETH being burnt along with them. This has led to several hours where more ETH was burnt than issued, effectively making it deflationary during brief periods of time.”
Finally, Outumuro says that the deflationary pressures on Ethereum will help the second-largest cryptocurrency become a store of value.
“As NFTs and other applications continue to grow on Ethereum, this creates deflationary pressure and reinforces Ether’s monetary premium. Ultimately, this aligns users and holders towards ETH becoming the store of value of the decentralized internet.”
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/andrey_l