Investors ditch Bitcoin for Ethereum as 50,000 ETH get burned
- Crypto holders in Singapore prefer Ethereum over Bitcoin, according to a survey by cryptocurrency exchange Gemini.
- A total of 50,000 Ethereum worth $165 million burned since the London hard fork makes ETH more likely to turn deflationary.
- Ethereum staked on the ETH 2.0 staking platform hits a new all-time high.
Ethereum’s future is likely to be deflationary with the higher level of ETH being burned. The amount of ETH held on exchanges is dropping consistently.
BTC popularity plummets as traders prefer deflationary cryptocurrency ETH
A recent survey by cryptocurrency exchange Gemini revealed that Ethereum is the most popular cryptocurrency in Singapore. Nearly 78% of crypto investors in Singapore hold Ethereum, and 69% have Bitcoin.
Ethereum’s rising popularity can be attributed to the increase in the number of deflationary blocks being produced since EIP-1559 went live with the London hard fork. $165 million worth of ETH has been burned in the past ten days.
As more Ethereum is pulled out of circulation, analysts note a rise in Total Value Locked (TVL) on DeFi and a spike in volume of Ethereum staked in the ETH 2 contract.
Guy, a cryptocurrency analyst, and YouTuber at CoinBureau, states that the Ethereum locked in DeFi is being held in smart contracts. It is most likely used in DeFi protocols to supply liquidity, earn interest or other types of yield farming tactics.
The ETH representing DeFi TVL is used for a specific purpose, and the investors that hold this Ethereum are less likely to sell it in the short term. At the same time, Ethereum staked in the ETH2 contract has hit a new all-time high of 6.72 million ETH. Ethereum that is locked away is out of the circulating supply for the long term, which fuels the bullish outlook of traders.
The total value of ETH staked in the ETH2.0 deposit contract
Ethereum has outperformed Bitcoin in terms of transaction volume, daily trade volume and return on investment, according to data from the Blockchain Center.
Further, as the Ethereum network heads toward the “Merge,” the upgrade that swaps the current proof-of-work (PoW) consensus mechanism with energy-efficient and secure proof-of-stake (PoS), Ether’s inflation is expected to drop, leading to deflation.
Traders expect “deflation” to positively impact Ethereum’s price, which makes it more attractive than Bitcoin.
According to FXStreet analysts, Ethereum’s next price target is $4,000, and this is a significant psychological level for the altcoin’s price rally. There is a surge in Bitcoin reserves on exchanges; however, in the case of Ethereum, the opposite is true.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
