Chart of the Day
A Steep Surge. The estimated annual inflation rate for ETH is climbing upwards in the aftermath of the Ethereum London hard fork announcement. At the height of the bull market in March and April 2021, the numbers sank as low as under 1%. Now, with the EIP 1559 proposal set to go live in August, potential fluctuations to ETH’s supply have driven expected inflation rates to exceed 3.5%.
Theoretically, EIP 1559 results in approximately 75% of ETH’s supply being burned as it moves away from a transaction-fee-as-income model. In reality, individuals can still tip miners to prioritize their transactions and changing gas fees will also factor heavily into the asset’s inflation forecast.
Talk of the Town
Sinking Ships. Bitcoin, the people’s hedge against inflation or not? According to the U.S. Consumer Price Index (CPI), inflation rates are currently at a peak not seen since the 2008 global financial crisis. Under such circumstances, the most logical thing would be for money to flow into BTC — hailed as the new-age store of value by many. Falling BTC prices paint a different story as the pioneering digital asset is down 3% and 7% over the last 24 hours and seven days respectively.
It is evident that the greenback is more covetable than BTC in the short term, but as any HODL-er playing the long game would say, “This, too, shall pass.”