On Tuesday, Ethereum (ETH) hit a new all-time high of $4,600 – reminding us, once again, that it’s still got some tricks up its sleeves.
- ETH’s rapid climb this year started in July, just before the highly-anticipated EIP-1559 upgrade went live. As a result, transaction fees are more predictable and a relatively small amount of ETH is now getting “burned” alongside every transaction (over $3 billion worth of ETH has been removed from the supply since the upgrade)
- The leading sources of ETH burning are perhaps two of the most trendy things in 2021, NFTs (for example, the OpenSea marketplace has removed more than 92k ETH) and SHIB swapping/trading (unlike DOGE, this meme coin is an Ethereum token)
- Just this week, another ETH upgrade called Altair quietly went live. The upgrade is perhaps the last upgrade to the Beacon chain before Ethereum fully transitions to a proof-of-stake network
Bottom Line: Popular crypto projects and initiatives continue to drive traffic to the Ethereum blockchain, and as a result of a recent protocol upgrade, all that traffic is having a big impact on the supply and demand (and obviously price) of ETH.
Want to Dig Deeper?
If Ethereum was a corporation and had a quarterly earnings report, what might it look like? Probably something like this. In a post inspired by James Wang, Ben Giove from Bankless explores Ethereum’s growth over the past year including the rise of NFTs, DeFi becoming larger than some banks, and the launch of EIP 1559.