Altcoin Daily host Aaron Arnold says he believes Ethereum (ETH) is poised for a massive move up amid exponentially strong fundamental growth.
In a new video, Arnold tells his 952,000 YouTube subscribers that Ethereum is going through a supply shock courtesy of the EIP-1559 update, which permanently removes a certain amount of ETH from the circulating supply each time a transaction is processed.
[adinserter block="1"]“The Ethereum block space is getting used and because Ethereum changed its monetary policy, an insane amount of ETH is getting burnt, over 100,000 ETH due to NFTs platform, DEXs (decentralized exchanges), DeFi (decentralized finance), play-to-earn [games], stablecoins.”
At time of writing, Ethereum tracking tool Etherchain shows that over 125,923 ETH have been torched since the update launched earlier this month.
Another reason why Arnold is bullish on Ethereum is due to its low annual inflation rate.
“For the first time, Ethereum’s daily issuance was actually lower than that of Bitcoin. So understand this: ETH’s net inflation was 1.1% annualized and Bitcoin’s net inflation was 1.75% annualized.”
Arnold is also looking at the explosion of the total value locked (TVL) in decentralized finance (DeFi) platforms. According to the Altcoin Daily host, the amount of capital locked in DeFi puts Ethereum in a position to compete as one of the largest banks in the world.
“Ever since the beginning of the year, the total value locked in DeFi, which is primarily Ethereum, has gone exponential. On January 1st, the beginning of the year, total value locked was [a] modest $16 billion. Seemed like a lot at the time. Today, that number is now a staggering $85 billion. This would place ETH as the 20th largest bank in the world by market cap.”
Finally, Arnold highlights that over a quarter of Ethereum’s total supply is locked in smart contracts.
“Ethereum in smart contracts, so this is basically Ethereum that can’t be sold because they are being utilized. They have utility. Due to the outright explosion of DeFi, the amount of Ether placed in smart contracts has similarly gone to all-time highs. In fact, an unbelievable 26% of all ETH is in smart contracts at the moment.
We can only expect this trend to continue.”
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