It should be noted that the implications of Etherium's move to PoS are already tangible. First of all, the cryptocurrency's network has started to consume at least 99 percent less power. On top of that, strong changes have taken place in the issuance of Ethers, i.e. the issuance of new coins.


Specifically, as of this morning, 6.8 thousand new ethers have been generated in the Eth blockchain since its transition to PoS. At the peak of October eighth, this figure was 13 thousand ETH, which means the difference between the two figures has been burned into commissions over the past week. Accordingly, the cryptocurrency has been deflationary for at least that period of time.

Etherium supply changes since the network switched to PoS

The funny thing is that if the network had continued on PoW, it would have generated 363,000 new coins in the same interval. That means the reduction in supply is more than tangible – and that’s a plus for ETH as an asset from an investor’s perspective.

Hypothetical supply growth of ETH on the Etherium network if it were to continue running on PoW

Why is ETH falling?

Lubin’s opinion on the first days of ETH price decline after the merger coincides with the most popular view on the subject. We’re talking about the so-called “news selling” effect, which means that the more market players anticipate an important event for the project, the more they buy tokens. Finally, at the “X-hour” itself, there are almost no buyers in the market, but there are a lot of token owners. Therefore, they, frustrated by the lack of bullrun continuation, begin to sell the asset en masse.

But why has the price of Etherium continued to decline for an entire month? Lubin thinks it’s because of the macro economy. Here’s his rejoinder, cited by Decrypt.

The economy is broken, and it’s likely to stay that way for a while longer. So we remain the tail wagging a very sick dog – the global macro situation in the world. But our ecosystem and our company are feeling pretty good, even with lower volumes and lower trading intensity. I think we are all enjoying the creation of new projects.

Etherium exchange rate since the beginning of September

As a reminder, ConsenSys is a leading developer of decentralised solutions based on Etherium. It can be considered one of the pillars of the altcoin network’s smooth running, so the ecosystem development mentioned by the CEO is really important for the long-term growth of ETH.

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The macroeconomic situation is indeed challenging: it is described by rising credit rates of many central banks around the world, skyrocketing inflation, problems in the oil market, the energy crisis in Europe and the military conflict. All this is putting a lot of pressure on traditional markets, and crypto still correlates strongly with them. The big cryptocurrency companies have only to maintain their operations and work on developing their infrastructure to attract as many users and investors as possible once the bearish trend is over.

The end of Bitcoin and altcoin collapse is at least a year away – this was previously stated by Solana CEO Anatoly Yakovenko. He, by the way, also shares Lubin’s view on the main reasons for the drop in prices of most cryptocurrencies. Lubin himself also foresees a lot of positivity in the unique token space. He continues.

I think NFT still has a lot of promise, the NFT sphere has a lot of innovation ahead of it. We are experiencing moments of irrational exuberance in relation to the decentralised finance industry. I think the field of unique tokens will continue to innovate and reach significant maturity, but it will be Web3 that will truly be the key element in the development of crypto.

ConsenSys CEO Joe Lubin

It’s true that as the NFT sphere develops, new problems are emerging – fraudulent schemes with unique tokens are only increasing in the amount of funds stolen, even as the overall popularity of NFT declines. The only way to solve this problem is to educate crypto-enthusiasts about the basics of cybersecurity, but as new players enter the niche, there will also be more and more room for hacks.


We don't think there's anything surprising about what's happening with ETH and other cryptocurrencies. After all, the digital asset industry is now in a bear market, which came after more than convincing growth in 2021. Accordingly, the current collapse is deserved, even without taking into account the problems in the global economy, the collapse of equities and other inconveniences - and these too are now more tangible than ever. So in this case, investors should not lose faith in the potential of coins, but they should be prepared for a prolonged period of rate problems.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. Talk about other important topics related to blockchain and decentralisation there as well.

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