Ether Price Hits New Record High as Analysts Anticipate Supply Drop

Analysts say ether will become a deflationary asset after the impending EIP 1559 upgrade.

Apr 22, 2021 at 11:48 a.m. UTC
Updated Sep 14, 2021 at 12:45 p.m. UTC

Ether (ETH) rallied to a new lifetime high on Thursday on speculation an impending blockchain upgrade might result in a drop in supply.

The native cryptocurrency of Ethereum's blockchain rose to a record high of $2,564 during European trading hours, toppling the previous peak price of $2,546 reached on April 16, according to CoinDesk 20 data.

"Ethereum's net annual issuance will drop substantially following the Phase 1.5 ETH 1 to ETH 2 merger," Messari's research Wilson Withum tweeted.

With the upcoming EIP 1559 upgrade, ether will "become a deflationary asset," Nick Spanos, co-founder of Zap Protocol, told CoinDesk. "This feature will reduce the coin supply and have a corresponding effect on the price, creating an attraction point for more buyers."

Ether issuance

Ether has been on a tear of late, outperforming bitcoin (BTC) by a wide margin. Ether has gained 35% this month while bitcoin is down about 8%.

Analysts studying ether-bitcoin (ETH/BTC) chart patterns say ether's outperformance could continue in the near term.

"ETH/BTC is getting a lot of attention as it broke above its long-term resistance of 0.04," Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, said. "We might see ETH-BTC push through 0.10. Expect sharp moves though, first to 0.06 in the coming weeks and subsequently to 0.1."

ETH/BTC is currently trading at 0.046 on Binance, according to data provided by TradingView.


The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.