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Ethereum’s Fiery Burn: $275 Million Vanished as Deflationary Trend Sparks Crypto Market Frenzy

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    • This month has witnessed the burning of nearly $275 million worth of Ether, reflecting Ethereum’s continuing deflationary trend.
    • Despite an initially sluggish year, Bitcoin and Ether have seen increased volatility in 2023, according to a report from K33.

Unpacking the Crypto Market Volatility

Good morning, and welcome to today’s update on the cryptocurrency markets. A fresh report from K33 details an interesting spike in volatility for Bitcoin and Ether in 2023, following a relatively slow start to the year.

Bitcoin kicked off the East Asia trading day at $27,686, representing a slight dip of 0.2%. Conversely, Ether saw a modest 0.4% rise, positioning it at $1,901. The year 2023 has been unusual for the crypto sphere, with initial grim price predictions for Bitcoin and a dormant market up until mid-May. However, things are starting to shift.

K33 Research’s new report indicates that Bitcoin’s trading range has seen considerable swings in the past week, largely driven by prospective debt ceiling agreements, regulatory changes in Asia, and Recep Erdogan’s re-election as Turkey’s president. These factors have contributed to increased market rallies, higher Bitcoin dominance, and trading volumes. K33 further asserts that the increase was partially fueled by over-leveraged shorts, which led to a drop in open interest.

Ether: The Potential Catalyst for Market Rally

While volatility is part and parcel of the cryptocurrency world, there is a growing consensus that the market needs a fresh catalyst to elevate prices. That catalyst might well be Ether.

Throughout the past month, over 143,830 Ether, equivalent to approximately $275 million, has been burned as per the data from tracker ultrasound.money. This puts Ethereum squarely in its deflationary stage, with a negative supply growth of 1.46% annually. The tracker estimates that Ethereum is set to burn around 2,441,000 Ether this year, or nearly $4.5 billion in value.

In contrast to if Ethereum continued as a Proof of Work protocol, which would have resulted in a supply growth of 2%, Ethereum’s deflationary stance has caused Ether and Bitcoin to begin deviating from their usual correlation. With Ethereum transitioning from Proof of Work to Proof of Stake, the supply-demand economics of the two tokens are likely to continue to diverge.

Pulkit Goyal, Vice President of trading at OrBit Markets, previously shared his perspective with CoinDesk, suggesting that this divergence might signal a long-term shift in the market. At present, over 13% of all Ether in existence has been staked, resulting in Ether balances on exchanges reaching all-time lows.

This brings our crypto update to a close, but keep an eye on Ether – it might just be the new market driver we’ve been waiting for.

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Nikita Dmitrievich
Nikita Dmitrievichhttps://www.ethnews.com/
Nikita, a young and ambitious crypto investor who has been actively involved in the cryptocurrency world for the past 6 years. With a keen interest in blockchain technology, Nikita has been investing in various cryptocurrencies and has seen significant returns on his investments. He is passionate about educating others on the potential of cryptocurrencies and frequently shares his insights on social media platforms. Nikita believes that cryptocurrencies are the future of finance and is constantly researching new projects to invest in. With his dedication and knowledge, Nikita is quickly becoming a prominent figure in the crypto community. Business Email: [email protected] Phone: +49 160 92211628