The decline in NFT and DeFi activity is causing deflation for ETH
Ramona Galas
Cryptocurrency market shifts from bearish to bullish as network activity surges, attracting new investors and institutional participants, with Ethereum experiencing a significant deflationary trend due to a spike in transaction demand.
In recent weeks, the cryptocurrency landscape has shifted from bearish to bullish due to a surge in network activity, attracting new investors, institutional participants, and crypto whales.
This transformation is primarily attributed to the anticipated approval of the spot Bitcoin ETF. According to Glassnode, Ethereum has experienced a significant deflationary trend in its supply due to a spike in transaction demand. Token transfers and stablecoin transactions have surged, while NFT and DeFi transactions have decreased, indicating a shift in market dynamics.
Despite challenges, ETH has recorded a more than 5% upside movement in the past 7 days, currently trading near $2,065.
The implementation of the London hard fork has transitioned Ethereum from a net inflationary state to one of stability and outright deflation, with increased supply burn and declining issuance rates.