The number of Ethereum addresses with non-zero balances hit a record high of 92.5 million on Monday. The 2022 bear market, which culminated in the bankruptcy of one of the world’s largest cryptocurrency exchanges in November, does not appear to have impacted the growing number of non-zero balance addresses. .
Some analysts see the number of Ethereum addresses holding non-zero balances as the second largest cryptocurrency surrogate due to the broader “adoption” of market capitalization. Seen through that lens, the continued, seemingly unstoppable increase in the number of Ethereum addresses with non-zero balances can be interpreted as a long-term bullish sign for the ETH cryptocurrency.
100 million non-zero address wallets in Q2?
Over the past three years, Ethereum has added about 20 million addresses with a non-zero annual balance. So, on the flip side of the cigarette pack calculation, that means we’ll probably reach the 100 million address mark in Q2 2023 with about 7.5 million remaining.
This will definitely be big news. The cryptocurrency market is notoriously fickle when it comes to responding to market narratives. A trader shouldn’t be too surprised to see ETH getting a boost right after his 100 million address mark prep/immediately non-zero.
Other indicators point to continued strong network growth
Increasing number of non-zero balances Ethereum is considered an overly crude metric. Each new non-zero address does not necessarily mean a new Ethereum user. Luckily for Ethereum bulls, there is a long list of other indicators pointing to strong continued network growth.
According to a recently released report from blockchain software developer Alchemy, the number of smart contracts deployed on the Ethereum mainnet will grow by nearly 300% in 2022. This means that the growth of smart contract deployments, despite the bearishness of 2022, is roughly in line with the rate of increase seen in 2021. market. According to the report, 4.6 million smart contracts were deployed on the Ethereum blockchain by the end of Q4 2022.
“The Web3 developer community has proven to be very resilient,” commented Jason Shah, Alchemy’s head of growth. “While honestly acknowledging the needless setbacks we have seen in 2022, this report shows that they are as focused and motivated as ever to build the future of this ecosystem. I am,” he added.
Elsewhere, the number of Ethereum network validators recently exceeded 500,000. The 400,000 mark was passed last July. A network validator is a computer that runs software that validates and verifies transactions on the blockchain. A high number of validators is seen as a sign of network strength, as it means it will be more difficult for a group of malicious validators to control the network and destroy the blockchain.
Ethereum deflation is another story that will gain momentum in 2023.
The bear market in the cryptocurrency market that began just over a year ago, with Ethereum’s price drop (ETH down about 67.5% from its all-time high set in November 2021), is the main story of the recent quarter. means
However, September 2022 saw significant changes to the Ethereum protocol that could give the cryptocurrency a significant boost in the long term. Last September, Ethereum moved from using a proof-of-work consensus mechanism to using a much less energy-intensive proof-of-stake consensus mechanism.
Not only will this alleviate concerns about the environmental impact of cryptocurrencies, but it will also save institutional capital in the coming years when Ethereum’s much more energy-intensive rival Bitcoin may struggle. , but Ethereum inflation has also fallen sharply.
Indeed, as of Sunday the 15thth As of January, Ethereum had an annual issuance rate of around 0.55%, but a burn rate of just under 1.2%. As a result, Ethereum is currently experiencing deflation at a rate of about 0.65% per year. When Ethereum was still a proof-of-work blockchain, its inflation rate was 4-5%.
Some analysts speculate that the deflationary impact of consolidation may have helped prevent ETH from falling below $1,000 and hitting new annual lows in the immediate aftermath of the FTX collapse. Bitcoin, by contrast, hit another yearly low following the FTX debacle.
Ethereum will soon receive its next major upgrade. The “Shanghai” hard fork is scheduled for his March and will allow staked ETH to be withdrawn for the first time. This is touted as a big plus for the protocol as it will likely encourage more investors to stake his ETH.