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Ethereum, the second largest cryptocurrency by market capitalization, has recently reached a new milestone in its burning volume. The implementation of the Merge protocol has resulted in the destruction of over 10,000 coins, marking a significant increase in the rate of burning compared to previous periods.
The increase in Ethereum's burning pace has the potential to finally start affecting the actual market price of the asset, as its circulating supply is now decreasing at a faster rate. Previously, the burning of Ethereum was more of a speculative opportunity that attracted investors, but the impact on the price was minimal.
On the other hand, Ethereum has been consistently moving upward throughout the market recovery that started in January, contrary to assets like XRP and Cardano. The cryptocurrency has been receiving constant support from retail investors as ETH staking became more popular on the market, in contrast to the December stalemate.
The burning of Ethereum coins serves to reduce the supply of the asset and increase its scarcity, thereby potentially leading to an increase in its value. This increase in demand and scarcity could be one of the factors that will drive the price of Ethereum upward in the future.
Despite the possibility of an improving price performance on the market with the help of coin burning, it cannot become a main source of support for the cryptocurrency, as Ethereum's backbone is network revenue that includes transaction fees and network activity.
With the further recovery of the market, we should see the rise of new solutions on the network, which should lead to the fundamental growth of the ecosystem and positive performance on the market.