Anxiety bells in Ethereum: Sharp increase in the last month!

Ethereum supply has increased by $47 million in the last month.
Ethereum supply has increased by $47 million in the last month. This sharp increase of 30 thousand ETH was largely due to the lack of transaction activity on the blockchain network.
Transaction flow dropped
Ethereum's historic transition from Proof-of-Work to Proof-of-Stake in September 2023 reduced ETH issuance by 90 percent. Many so-called Ethereum maximalists believed that this change would increase ETH's status as a deflationary currency and only then would it gain value.
According to data aggregator ultrasound.money, in the last 30 days alone the global ETH supply has increased by approximately 30 thousand ETH, which equates to approximately $47.9 million. This sharp increase in the amount of ETH in circulation occurred due to an equally sharp decrease in transaction flow on the Ethereum network.
The Ethereum network operates with a fee burning mechanism since 2021; As traffic on the network increases, the gas prices required to complete on-chain transactions also increase. The higher gas prices, the more ETH is “burned” or permanently removed from circulation by the network.
Recently, Ethereum gas fees have dropped considerably, with the average network transaction currently costing 7 gwei or $0.24.
While lower gas fees are good for the average Ethereum user, they have also led to less ETH being burned and therefore increases in the global ETH supply.
Ethereum's recent inflationary trend has caused some concern among crypto users and investors, who fear that current trends could spell trouble for the long-term financial health of the network.
However, the team behind Ethereum seems largely unconcerned about this development.
“I suspect none of the core developers care,” Micah Zoltu, one of the Ethereum core developers, told Decrypt about his colleagues' stance on the issue. said.
Danno Ferrin, another Ethereum core developer, stated that he is not worried about Ethereum's recent inflationary hit.
Inflation has been on a steady rise globally since last year; Prices in the United States rose last June at the sharpest annual rate since 1981. In response to this economic environment, the US Federal Reserve has repeatedly raised interest rates, which has continually reduced the values of cryptocurrencies such as Bitcoin and Ethereum.
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