In the dusty corners of the digital frontier, where fortunes are made and lost faster than a tumbleweed rolls, Ether (ETH) has taken a nosedive, plummeting nearly 70% against Bitcoin (BTC) since the fateful Merge. It’s as if Ethereum decided to play hide and seek, but forgot to seek. 🤷♂️
Ah, the grand transition to proof-of-stake (PoS) back in September 2022 was supposed to be the dawn of a new era. It promised to be the knight in shining armor, rescuing Ethereum from the clutches of inefficiency and transforming ETH into a “deflationary” asset. Analysts were practically throwing confetti, predicting it would flip Bitcoin’s market cap like a pancake on a Sunday morning. 🥞
But lo and behold, two years later, Ethereum’s performance is more like a sad country song, while Bitcoin has waltzed away with a 160% gain against Ether since the Merge. Talk about a plot twist! 🎭
ETH Supply Rate: A Comedy of Errors 2.5 Years Post-Merge
As of February 4, Ethereum’s supply growth rate is hanging around 0%, according to UltraSound.Money. It’s like watching a snail race—slow and not very exciting. The Merge’s disinflationary effect? More like a disillusionment effect! 😅
At its peak, the supply rate was a thrilling -0.37% back in April 2024. Ethereum’s deflationary mechanism, which relies on EIP-1559 to burn a portion of transaction fees, is now about as effective as a chocolate teapot. As on-chain activity dwindles, gas fees drop, leading to fewer ETH burns. It’s a vicious cycle, folks! 🔄
Data from Token Terminal shows that Ethereum’s average transaction fee peaked above $15 in March 2024, only to plummet below $5 by April. It’s like watching a balloon deflate at a party—sad but inevitable. 🎈
The downward trend continued through mid-2024, reflecting a steady decrease in network demand. While fees stabilized in late 2024 and early 2025, they now sit well below previous highs, resulting in a rising Ether supply. It’s like trying to fill a bucket with a hole in it! 🪣
Investors Fleeing Ethereum: The Great Exodus
According to data shared by Joao Wedson, CEO of Alphractal, Ethereum’s long-term holders have been offloading their precious ETH since the Merge. It’s like watching a game of musical chairs, and everyone’s scrambling for a seat! 🎶
Alphractal’s data reveals that wallets holding 100,000 ETH or more have drastically reduced their holdings, while addresses with 1 million ETH have also taken a hit. It’s a mass exodus, folks! 🏃♂️💨
“Long-Term and Short-Term Holders stopped accumulating ETH since September 2022,” Wedson lamented, adding:
“Even Exchange addresses, former miners, and funds with over 100k ETH aren’t buying.”
The data suggests that major holders may be losing faith in ETH’s long-term prospects. Meanwhile, Bitcoin wallets holding 100
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2025-02-04 15:22