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Number of Ethereum addresses holding a non-zero balance hit a new high on Monday of 92.5 million. The 2022 bear market, which culminated in the collapse of one of the world’s former largest cryptocurrency exchanges in November, does not appear to have impacted the growth in the number of unbalanced addresses. bad.

Some analysts consider the number of Ethereum addresses holding a non-zero balance as a proxy for the second largest cryptocurrency by market capitalization wider “adoption”. Seen in this light, the continuous and seemingly unstoppable increase in the number of non-zero balance Ethereum addresses can be interpreted as a long-term bullish sign for the ETH cryptocurrency.

100 million portfolios of non-zero addresses in the second quarter?

Over the past three years, Ethereum has added around 20 million addresses holding a non-zero balance per year. The calculation of the cigarette box return therefore implies that, with only around 7.5 million to go, the 100 million address mark will likely be reached in the second quarter of 2023.

This will undoubtedly be great news. Cryptocurrency markets are notoriously fickle when it comes to responding to market narratives. Traders should not be too surprised to see ETH get a boost in the lead up to/immediately after the 100 million non-zero address mark was hit amid all the hype and positive press the achievement is likely to attract.

Other metrics also signal continued strong network growth

The growth in the number of non-zero Ethereum balances is considered by some to be too crude a 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 metrics that also point to continued strong network growth.

A report recently released by blockchain software development firm Alchemy, the number of smart contracts deployed on the Ethereum mainnet grew a staggering nearly 300% in 2022. This means that the growth in smart contract deployment corresponded to roughly at its rate of increase seen in 2021, despite the bear of 2022 market. There were 4.6 million smart contracts deployed on the Ethereum blockchain at the end of Q4 2022, the report notes.

“The Web3 developer community is proving extremely resilient,” commented Jason Shah, Head of Growth at Alchemy. “This report shows that they are more focused and motivated than ever to build the future of this ecosystem, while honestly acknowledging the unnecessary setbacks we saw in 2022,” he added.

Elsewhere, the number of Ethereum network validators recently topped 500,000. It only topped 400,000 last July. A network validator is a computer that runs software that verifies and validates transactions on the blockchain. A higher number of validators is considered a sign of network strength, as it implies that it would be more difficult for a malicious group of validators to take over the network and corrupt the blockchain.

Ethereum deflation is another narrative that will gain traction in 2023

The bear market in cryptocurrency markets that began just over a year ago means that the decline in Ethereum prices (ETH is down around 67.5% from its records recorded in November 2021) has been the dominant story in recent quarters.

But a key change was made in September 2022 to the Ethereum protocol that should give the cryptocurrency a major long-term boost. Last September, Ethereum switched from using a proof-of-work consensus mechanism to using the much less energy-intensive mechanism. proof of stake consensus mechanism.

Not only does this lessen concerns about the cryptocurrency’s environmental impact, which could help it attract institutional capital flows in years to come where Ethereum’s much more energy-intensive rival Bitcoin might struggle, but Ethereum’s inflation rate has also dropped sharply.

Indeed, from Sunday 15e of January, Ethereum’s annual emission rate was around 0.55%, while its burn rate was slightly lower at 1.2%. As a result, Ethereum is currently experiencing deflation at a rate of approximately 0.65% per year. Back when Ethereum was still a proof-of-work blockchain, its inflation rate was 4-5%.

Some analysts have speculated that the deflationary impact of the meltdown may have helped prevent ETH from falling back below $1,000 and hitting new yearly lows in the aftermath of the FTX crash. By contrast, Bitcoin hit new yearly lows following the FTX debacle.

Ethereum will soon undergo its next major update. The “Shanghai“The hard-fork is expected in March and will enable the withdrawal of staked ETH for the first time, a change that is being touted as a great benefit for the protocol as it will likely encourage more investors to stake their ETH.





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