By: Isha Das
The cryptocurrency market has depicted a unique shift, with Ethereum exchange deposits demonstrating a surge which outpaces withdrawals. This change, which reverses the trend of higher withdrawals seen during the FTX breakdown, has Ethereum experiencing approximately 105,000 ETH in deposits against 75,000 ETH in withdrawals. This influx into exchange platforms suggests a unique divergence from the market behaviour of Bitcoin, which continues to see withdrawals surpassing deposits. This difference highlights distinct investor perceptions and strategies toward the two leading cryptocurrencies.
Despite Ethereum's move affecting its scarcity due to the historic burning of over 4 million ETH one year ago, the ETH/BTC ratio has taken a steep plunge, showing an 18% decline. This is in stark contrast to the Bitcoin market, which has absorbed billions of dollars worth of supply. While the burn of Ethereum was expected to buoy the ETH/BTC ratio, the result indicates adjustments in understanding the relationship of supply dynamics and relative market performance in the crypto ecosystem is required.
Ethereum's transition to proof of stake system, a year ago, led to massive reductions in energy use and improvements in network access, but also resulted in significant concerns over centralization. Since the Merge upgrade, Ethereum has observed a drop in power consumption by 99.9%, making it environmentally more sustainable. While this shift stimulated a surge in Ethereum staking, leading to potential supply scarcity, Ethereum Core Developers recently approved the EIP-7514 to slow the growth rate of ETH staking, providing the Ethereum community with additional time to implement improved validator reward schemes.
The implementation of EIP-7514 has indirect effects on the Ethereum price by manipulating the supply dynamics but isn't expected to have immediate effects. Any potential impact would likely manifest over a longer time duration. At the moment, Ethereum is trading at approximately $1,628 and, despite certain fluctuations, has maintained a stable momentum.
© BlockBriefly. All Rights Reserved.