With the mechanics presented from the EIP-1559 update, over 940,000 Ethereum coins have been burned and lost. with increased network usage And soon investors will see 1 million ETH burn in the next few days.
The current burn rate is around 12,000 ETH per day, making it expected to burn 1 million ETH in the next 4-5 days. The amount of coins burned will also decrease.
How does coin burning affect the market?
Due to its high burn rate, Ethereum may enter a supply shock when the asset’s price fluctuates rapidly due to a lack of balance between supply and demand.
And things are getting worse as ETH volumes on exchanges are being drained rapidly. This indicates that traders are reluctant to sell their holdings and want to keep them elsewhere.
Most cryptocurrency analysts have observed that long-term investors hope to see Ethereum reach the status of a deflation asset. This means faced with situations where coins are burned rather than issued.
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