Ethereum Inflation Rate Is Now Lower Than Bitcoin ! What This Means For ETH & BTC Price ?

Ethereum

Ethereum’s inflation rate is now lower than that of the most valuable cryptocurrency, Bitcoin.

Famous crypto proponent and influencer, Lark Davis, tweeted this development to his over 700k followers on Twitter following his vlog update concerning the news on YouTube.

According to statistics from on-chain analytics firm Glassnode, Ethereum has recorded inflation rates that underline Bitcoin’s inflation rates over the past 3 months.

This is a new milestone for the Ethereum token as it continues to track Bitcoin’s success in the industry. 

The advent of Ethereum’s low inflation borderline deflation has once again sparked the discussion of ETH hard money in the industry.

Ethereum’s Hard Money Controversy

Hard Money in finance essentially means a currency, fiat or not, that is backed by valuable physical exchangeable commodities like silver and gold. The concept of hard money relative to crypto leverages the concept of stablecoins that are backed by fiat currencies to ensure stability effectively merging the traditional finance sector and the crypto DeFi sector on a fundamental level.

In the crypto industry globally, Ethereum has the highest relevance thanks to its robust adaptability to the blockchain network and the industry-wide utility of its crypto token. under different forms. The growing relevance has led to deflationary concerns which have raised debate over its usefulness as a hard currency.

The debate about whether Ethereum can grow to effectively sub as hard money all by itself raised a lot of questions that answers couldn’t be answered due to the inherent constraints of the crypto technology in itself. The hard money debate was inconclusive with highlights that only listed the digital asset’s shortcomings concerning its adoption as hard money.

However, the crypto whale and founder of a bitcoin investment platform cited Glassnode’s chart that showed the circulation supply of Ether and bitcoin arguing that crypto is now a contender in the race to the relevance of hard money.

He further argued his position when he said that hard money does not constitute only the supply of low inflation rates but also the immutability of the featured inflation, citing the case crude oil as the commodity isn’t a hard money despite OPEC’s featured low inflation rates. OPEC is the Organization of Petroleum Exporting Countries that oversee and regulate the price of crude oil globally.

Ethereum’s deflationary campaign

Ethereum’s record inflation rates and borderline deflationary regime come after the integration of the EIP 1559 protocol on the Ethereum blockchain.

The Ethereum Improvement Proposal (EIP) 1559 upgrade burns Ether tokens per transaction on the blockchain by burning the gas fees that were formerly used to incentivize miners in the industry.

The gradual loss of Ethereum against overtime is expected to eclipse the supply by the network, reducing the total number of ETH in circulation.

The overall supply reduction and increasing demand have set Ethereum down the oath of deflation and the crypto is now backed to become the world’s first deflationary cryptocurrency.

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