Although the Ethereum 2.0 protocol is continuously delayed, analyst and investor Alex Saunders said that this version is still on the right track, expected to be released on time in July 2020. Saunders charted his calculations for ETH stock-to-flow.
I charted Ethereum’s current stock to flow (white) vs where it will sit in the next 1-2 years (black). Inflation will decrease with proof of stake & burning of fees (EIP1559). ETH’s monetary policy is evolving. $ETH is becoming better money. ???️ Data: https://t.co/3U6tu58ceB pic.twitter.com/0K7PuRJ0nk
— Alex Saunders ???? (@AlexSaundersAU) May 27, 2020
ETH may just cross Silver in terms of scarcity
Saunders stated:
“Ethereum’s S2F in 2019 was close to 21.95, which, when compared, was close to a precious metal like Silver at 22, wasn’t a negligent value. However, as the chart progresses into 2020, ETH may just cross Silver in terms of scarcity.”
Sauders were predicting that the former’s S2F will reach 28.25 (White) by the end of the year. With the expected launch of Ethereum 2.0, Saunders calculated S2F would increase by 100% by 2021 (Black). However, since these are based on the implementation of the protocol upgrade, which has been postponed multiple times previously, the community will have to wait for the final launch of ETH 2.0 that will replace mining for staking.
Saunders expects the stock-to-flow to reach 57.2 by 2021, and it will only get closer to 58.5 by 2022. Gold’s current stock-to-Flow is around 60, and this push could make Ethereum an even more precious asset.
When Ethereum becomes scarce, the inflation rate is expected to decrease.
Saunders stated:
“Inflation will decrease with proof of stake & burning of fees (EIP1559). ETH’s monetary policy is evolving. $ ETH is becoming better money.”
With the implementation of proof of stake, the inflation rate is expected to drop by 2%. This drop will be close to Bitcoin’s inflation rate in its fourth era, estimated to be around 1.8%. Ethereum’s inflation rate may drop more than even gold’s as its annual Inflation is at about 2.5%.
Currently 667.83 million addresses on the Ethereum blockchain
According to IntoTheBlock, there are currently 667.83 million addresses on the Ethereum blockchain, a number representing a 9.7% YTD increase. Of these, 30.26 million addresses have balances in Ethereum. Besides, the highest number of addresses has a balance of 30.48 million ETH.
When approaching the launch of ETH 2.0, Ethereum witnessed a rapid increase in the number of addresses. When ETH’s price reached ATH of about $ 1,400 in 2018, the number of Ethereum addresses was less than 10 million. Although the price of ETH has dropped by more than 80% since then, the number of addresses with non-zero balances increased by 350%.
Source: Glassnode
At press time, Ethereum’s Active Supply for six months-12 months [1d MA] had reached a 3-month high of 20,653,710,315. This pointed to a rise in small ETH hodlers as they explore the 2.0 launch.
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Read more:
- ETH Price Is Seriously Undervalued, Citing On-Chain Data Indicating That ETH Is Trading Far Below A Fair Price
- Glassnode: The Active ETH Supply Hit 3-Month High, The Number Of New Wallets Has Surged But ETH Price Is Clearly Undervalued