Obviously nobody knows for sure, but I would like to pose the question: how will the transition to proof-of-stake affect ETH price action? Some related thoughts:
– Price is a function of supply and demand
– Demand is generated by transaction fees, investment activity, and ETH-based-product purchases (i.e. NFT)
– Supply is driven by the Etherium network fundamentals, and some changes to supply mechanics are coming with EIP-1559
Now, I think we all know that proof-of-stake is intended to reduce the cost of transaction fees (“gas”) but my related question is, how much of today’s demand for ETH is due to transaction fees? Related, if ETH users no longer require much ETH for payment of transaction fees, how will that affect demand for ETH?
I would love to hear some thoughts on this topic from the community, what do you guys think?