Kaiko Research Report: Ethereum’s Growing Supply Could Curb Potential Price Increases in the Short Term

BlockBeats news, on August 19, cryptocurrency analysis company Kaiko Research released a report stating that Ethereum's gas fees recently fell to a five-year low, mainly driven by increased Layer 2 activity and the Dencun upgrade in March, which reduced Layer 2 transaction fees. This fee reduction has an impact on ETH, because lower fees mean less ETH burned, thereby increasing the supply of tokens. As a result, the total supply of Ethereum has continued to rise since April. Despite the existence of demand drivers such as spot ETH ETFs, this growing supply may curb potential price increases in the short term.

Since the beginning of the second quarter, the overall demand for AI tokens has fallen sharply. By early August, weekly trading volume plummeted to $2 billion, a sharp drop from the multi-year high of more than $13 billion in the first quarter.

The stablecoin FDUSD reached an all-time high of 39% market share at the end of July, reversing the trend of continued decline over the past three months.

BlackRock’s on-chain tokenized fund BUIDL (which stands for BlackRock USD Institutional Digital Liquidity Fund) is one of many funds launched in the past 18 months that provide exposure to traditional debt instruments such as US Treasuries. It has quickly become the largest on-chain fund by assets under management (AUM). The fund was launched in March 2024 in partnership with Securitize and has attracted more than $520 million in inflows to date.