- The Merge upgrade appears to be driving more users to the Ethereum network.
- The number of ETH addresses holding at least 10 coins has surged.
Institutional and retail investors are driving the ETH rally as an increasing number of addresses holds more than 10 coins. According to CryptoMonday.de, such ETH addresses have increased from 277k on Dec 20th 2021, to 350k today. This represents a YoY increase of 26%.
This surge is indicative of the growing investment interest in Ethereum as investors seek to gain exposure to the world’s second-largest cryptocurrency. This could be attributed to the significant adoption of Decentralized Finance (DeFi) projects, which have been gaining traction over the last year. In addition, Ethereum-based NFTs have also become increasingly popular, leading to more investors allocating capital towards ETH.
According to CryptoMonday CEO Jonathan Merry, "The Merge upgrade is the primary factor driving users to Ethereum. The ability for Ethereum to act as a store of value, combined with the growing popularity of DeFi and NFTs, has made it an attractive asset to investors. We expect this trend will continue as more people become aware of the potential of Ethereum."
The rise of small-time investor activity implies that smaller investors, who may be more risk-averse, are also allocating capital towards Ethereum. This could be an indication of the network’s growing appeal as investors become more comfortable with cryptocurrency investments.
The Merge Impact on Ethereum
Since the historic Merge upgrade, Ethereum has been able to transition from a Proof-of-Work (PoW) protocol to a Proof-of-Stake (PoS) mechanism. This is expected to provide numerous benefits for the network, such as increased scalability and faster transaction speeds.
The shift towards PoS could also make Ethereum a deflationary asset, as the network will no longer issue new coins. This could make Ethereum an attractive store of value for investors, especially in the current macroeconomic environment characterized by skyrocketing inflation.
In addition, staking rewards are expected to incentivize more users to participate in the network and increase their holdings of Ether tokens. All these factors could drive further demand for Ethereum and potentially create a more sustainable price rally.
Demand for Ethereum
The increasing demand for ETH, as evidenced by the surge in addresses holding more than 10 coins, is a positive sign that more investors are allocating capital towards Ethereum. This, combined with the Merge upgrade, which has opened up numerous possibilities for the network, could lead to a sustained ETH price rally in the near future. However, it remains to be seen how Ethereum will fare in the coming weeks and months as investors continue to monitor the network’s performance.
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