- A record number of ETH has been burned in the past week.
- ETH has never been as deflationary as now.
- ETH deflation has been most likely supercharged by the meme coin mania led by PEPE.
Ethereum’s native currency, ETH, is frequently called “ultrasound money” due to its deflationary properties.
Indeed, ETH has been consistently deflationary since Ethereum switched from a proof-of-work to a proof-of-stake consensus mechanism. And it’s been extra deflationary in the past week or so, thanks to the ongoing meme coin mania led by PEPE.
ETH Hits Record Deflation
Ethereum’s native currency ETH has been steadily going deflationary since merging the proof-of-work and proof-of-stake chains. However, in the past seven days alone it has burned around a significant portion of all ETH burned.
According to data from Ultrasound Money, 33,200 ETH has been burned in the last week. This represents a whopping 21.5% of all ETH burned since the merge 232 days ago, which currently stands at 154,154 ETH. ETH has never been more deflationary than now.
The 33,200 burned ETH in the past week equals a 1.44% yearly deflation. If Ethereum still used proof-of-work, ETH’s supply would grow by 2.09%.
What’s even more impressive about these numbers is that crypto is currently in a bear market and there’s little economic activity going on.
However, the meme coin mania that seemingly came out of nowhere is spurring the current ETH deflation.
Meme Coins Supercharge ETH Burn
If there’s one thing meme coins are great at doing post-merge, it’s burning ETH and increasing its deflation.
The current meme coin mania has most likely supercharged the current ETH deflation. PEPE, a meme coin that surfaced just a few weeks ago, has pumped almost 3,000% and captured many hearts in the crypto space.
PEPE is currently the 58th largest cryptocurrency with an almost $900 million market capitalization, according to data from CoinGecko.
Other meme coins like WOJAK, CGPT, and WSB have also contributed to high gas fees and, in turn, larger ETH burn. In general, gas has increased significantly in the past few weeks, with people spending $20 and more on a single transaction.
On the Flipside
- The meme mania may be unsustainable due to a weak economic environment and the ongoing bear market. Once the meme craze ends, ETH burn will significantly subside until the next bull market or another meme mania.
Why You Should Care
ETH being deflationary is one of the most attractive properties of the asset. Investors should consider following the deflation/inflation curve of ETH to position themselves better.
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