Fidelity’s Insights on Ethereum Inflationary Period

Ethereum Inflationary Period: What Investors Need to Know

The last quarter saw the Ethereum network reach its peak inflationary phase, according to a report released last week by Fidelity Digital Assets. About 110,000 Ether was added to the total supply, which corresponds to an annual inflation rate of 0.37%. According to the research, there have been 5% more validators on the network since April, and the recent implementation of restaking may increase demand for staking even more.

While dramatic fluctuations in ether’s supply are unlikely in the short- to medium-term, the growing preference for lower-fee layer 2 platforms and increasing staking demand suggests that inflationary quarters may become more frequent,

analysts Daniel Gray and Max Wadington

Ethereum Transactions on Layer 2 Increase by 20%, Says Fidelity

Fidelity adds that layer 2 platform acceptance has been strong, with layer 2 transactions increasing by about 20%, and that this performance could be a promising indicator for the future of the Ethereum network following the Dencun upgrade in the first quarter. According to the note, ether is currently trading almost 67% over its realized price, which was $2,050 at the end of the second quarter. Though ETH is still well behind its 2021 highs, that is the highest since its inception.

According to Fidelity, this may suggest that investors are feeling more at ease with ether allocations than they were at the 2021 highs. Fidelity reports that the fundamentals of the Ethereum foundation layer all decreased in the second quarter, following a robust start to the year. Monthly transaction counts decreased by 9%, new addresses dropped by 16%, and active addresses declined by 14%.

FAQ

For more up-to-date crypto news, you can follow Crypto Data Space.