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Retail users continue to acquire Ethereum on a large scale year-to-date

Ethereum user adoption continues to expand rapidly and its massive size is not even affected by the recent price drop of ETH.

Ethereum adds over 6.2 million wallets with 0.01 – 1 ETH since early 2021, despite price drop

Since the start of the year, a staggering amount of wallets with 0.01 – 1 ETH in them has been added: more than 6.2 million.

“Liquidation cascades have dramatic effects on price but don’t change underlying fundamentals. Ethereum added more than 6.2M addresses holding 0.01-1 ETH year to date. User adoption is growing rapidly and was not meaningfully impacted by the crash”, CoinMetrics stated.

retail-users-continue-to-acquire-ethereum-on-a-large-scale-year-to-date

Source: CoinMetrics.io

Accordingly, it seems that despite the negative impact of the recent ETH liquidations, the coin’s fundamentals remain strong. Meanwhile, validators continue to deposit ETH to the Ethereum 2.0 contract. The total value locked in it has reached a historic peak of 7,534,146 coins.

Ethereum’s fee structure, which brings a fee-burning mechanism to the network, is accelerating day by day due to the elevated network load and increased base fee. These caused $35 million worth of burnings in the last 24 hours, which is the record for the number of coins burned in one day.

Large burn volume on the network inevitably led to the formation of deflationary blocks on the network. At some point, the number of deflationary blocks when less Ethereum has been mined than burned formed deflationary days. From an economic perspective, deflation works in favor of long and mid-term holders who have been able to accumulate a large number of Ethereum coins before the EIP-1559 update.

Previously, analysts predicted that Ethereum would become deflationary by the end of the year. Unfortunately or not, the high minting volume on various NFT projects and general network congestion has led to the network’s state now. Most likely, once NFT volumes decrease, the base fee and burning rates will also drop.

While the circulating supply of Ethereum will continuously decrease, according to on-chain data, demand for the coin is gradually increasing. The growing number of Ethereum holders is a sign of overall positive sentiment in the market.

At press time, over 6.2 million addresses are holding over 0.01 ETH. The growing number of Ethereum holders is a sign of overall positive sentiment in the market.

ETH/USD 4-hour chart | Source: TradingView

Currently, Ethereum price is trading at $3320 and is consolidating after a recent 16% drop in the last seven days. But even after the flash crash, the owners and investors still haven’t moved their funds on the exchanges and decided to keep holding their coins.

Earlier this week, the founder and CEO of SkyBridge Capital, Anthony Scaramucci, shared about the further development of Ethereum. He believes both ETH and ADA will continue to grow as there are numerous use cases for them now and in the future.

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