Ethereum Token Burn Skyrockets ETH Price To $1700, Possible Bull Run?
Decentralized blockchain-based Network, Ethereum, conducted a token burn on Feb 2nd, burning a total of 3040ETH tokens from its circulation. This token burn had a significant impact on the token price skyrocketing ETH to $1700. Could this possibly be an entrance into a bull season?
Token Burn, A Price Stimulant
Token burns in the cryptocurrency sector have always been perceived as price stimulants which stimulate massive surges in price. The underlying principle of this token burn works on scarcity in supply and increased demand.
Burning of cryptocurrencies occurs when a specified amount of token is sent out to a wallet that only receives crypto and can't send back. This sent tokens are lost forever, hence, reducing the supply of tokens in circulation.
As with the guiding principle of demand and supply, when there is scarcity, demand increases and influences the price of the commodity, hence, creating more value for the asset.
This Ethereum token burn was no different; the price of Ethereum has rallied for months between the $1400 to $1600 mark. However, this recent event skyrocketed the price to the $1700 mark which is a new high since the market crisis began.
Crypto Market Recovering From This Market Crisis
The market crisis which began after the Terra(LUNA) crash worsened after FTX exchange filed for bankruptcy. All cryptocurrencies took a hit, plummeting and recording new lows. Some cryptocurrencies like stablecoins lost their pegs, while others lost value and some even went extinct from the market.
However, there has been little recovery since the beginning of 2023, from the memecoin season which revived the Solana ecosystem a bit, to the collaboration of different projects, and the influx of millionaires and institutional investors into the crypto space for investment purposes.
It is however too early to decide if this surge and increased stability in the crypto space could invite in the next bull run, or if it’s just a bubble that will burst open in a few weeks. Market experts have however advised investors to be cautious during this period and research thoroughly before making any investments.
Data from Coinmarketcap shows Ethereum currently trading at $1647, from its 24-hour all time high of $1704.46.
Let me also know what you think, do you think we are ready for the next bull run or we still have some new bottoms to hit in the coming months?
TWT: Tea with Tcheesy☕ is an episode on medium where I talk about latest crypto news and happenings, if you want to stay informed follow me and subscribe to get daily news.
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