ETH Supply in 2026: The Policy Fight Is Over, the Market Decides

For most of 2026 the loudest argument in Ethereum was not about price or scaling. It was about supply: whether the network should keep minting more ETH than it destroys, and whether the protocol itself should step in and force the balance back toward deflation. On 1 October that argument reached a resolution, though not the one the reformers wanted. The proposal that would have re-engineered Ethereum’s issuance was pulled from the next upgrade, and the chain’s monetary policy was left exactly where it was: modestly inflationary, and steered by nobody in particular.

That leaves a strange arrangement. Ethereum now issues roughly 1,700 ETH a day to validators while burning only 50 to 70, so the supply creeps up by a few tenths of a percent a year, according to Bitget’s 2026 supply review. The automatic scarcity that carried ETH through 2022 and 2023 is gone at the protocol level. What is left is scarcity of a different kind, produced not by code but by behavior: ETH locked in staking contracts, parked in corporate treasuries, and held inside exchange-traded funds. In 2026 the market, not the protocol, decides how scarce ETH is.

October stress-tested that arrangement in the least forgiving way. ETH changed hands near $2,360 on 15 October after a hotter-than-expected inflation print knocked it down almost 6% in a single session, per CoinGecko data, and it had already slid from about $2,726 at the start of the month. The engines that had quietly absorbed supply all year stalled at the same time. What follows is a map of where ETH supply actually stands, why the protocol stopped doing the scarcity work, and what market-set scarcity means on a day when the buyers step back.

The argument that just ended

To see why this matters, rewind to the thesis that made ETH famous among its own holders. The Merge in September 2022 cut Ethereum’s issuance by roughly 90% overnight, and EIP-1559, live since August 2021, burns the base fee of every transaction. Put those two together in a period of heavy demand and the network can destroy more ETH than it creates. For a stretch in 2022 and 2023 it did exactly that, and the community gave the phenomenon a name: ultrasound money, a coin whose supply shrinks when the chain is busy.

Then the engine stalled. The Dencun upgrade in March 2024 introduced blobs, a cheap, temporary data lane for layer-2 rollups. Fees on those rollups fell by 90% or more, activity migrated off the main chain, and the base-fee burn that powered the deflation thesis collapsed with it. Ethereum has been mildly inflationary ever since. The remedy floated to reverse that was EIP-8363, the Tapered Issuance Burn, and for two months it was the center of the entire supply debate. On 1 October its own authors withdrew it from the Hegota upgrade.

Jerome de Tychey, president of Ethereum France and one of the proposal’s six authors, said the issuance question had drawn too much heat and too many objections to be settled inside a routine fork. “The topic is too important and raised too many concerns that it deserves its own process,” he wrote in announcing the withdrawal, as reported by CryptoBriefing. The authors proposed a separate track, running into 2027, to debate issuance policy on its own terms. For now the practical result is simple: Ethereum’s issuance, staking rewards, and validator economics stay as they are, and the protocol has formally declined to manufacture scarcity. That job now belongs to the market.

Where ETH supply stands today

Before the argument about what should happen, here is what is actually happening. Total supply sits around 122 million ETH, barely above the 120.5 million that existed at the Merge, with net issuance close to zero on a weekly basis and modestly positive over the year, per ultrasound.money. More than 4.6 million ETH has been burned since EIP-1559 went live, but the daily burn now runs at a trickle. The headline numbers that matter for scarcity are not about issuance at all; they are about how much of the float has been taken off the table.

Each of those lines is sourced in the sections below. Read together, they say that ETH’s apparent scarcity is an accounting of behavior, not a property of the code. Every one of them can reverse, and in October several began to.

Why the chain mints more than it burns

Two flows set Ethereum’s supply. On one side, the protocol issues new ETH to validators for securing the chain; that issuance scales with the square root of the amount staked, which today works out to roughly 1,700 ETH a day. On the other side, EIP-1559 burns the base fee attached to every transaction, so the destruction rate rises and falls with how congested the main chain is. When blocks are full and gas is expensive, the burn can exceed issuance and supply shrinks. When blocks are quiet, issuance wins.

Since Dencun, blocks have mostly been quiet, because the activity moved. Rollups now post their data to blobs rather than to expensive calldata, and users followed the cheap fees onto layer 2. The main chain still settles those rollups, but it captures far less fee pressure per unit of economic activity than it did in 2023. The result, again per Bitget’s supply review, is a burn that fell from thousands of ETH a day to as little as 50 to 70, against issuance that never stopped. Net supply has grown modestly almost every month since, a quiet reversal of the ultrasound-money era in all but name.

The Fusaka upgrade in December 2025 tried to keep the blob market from collapsing to zero by adding a blob base-fee floor, but a floor under one fee is not a revival of the burn. For deflation to return on its own, the main chain would need sustained, expensive demand of exactly the kind that scaling was designed to move elsewhere. That is the paradox at the heart of ETH supply in 2026: the network got the scaling it wanted, and scaling is precisely what defused its scarcity engine.

EIP-8363: the lever that got pulled

EIP-8363 was the counter-move. Submitted on 4 August by a group of Ethereum Foundation-adjacent researchers that included Justin Drake, and shepherded by de Tychey, the Tapered Issuance Burn would have burned a rising share of validator rewards as the staking ratio climbed. The burned fraction would reach 100% once about 60.25 million ETH, close to half the supply, was staked, zeroing out net issuance at the consensus layer. It would phase in over roughly 18 months and touch only consensus rewards; the priority fees and MEV paid at the execution layer would be left alone. The stated goal was minimum viable issuance: pay validators no more than security requires, and stop the staked share from marching toward the entire supply.

The reaction was ferocious. The debate pulled in researchers, DeFi founders, and the publicly listed companies that now hold ETH as a treasury asset, and The Defiant reported that Aave founder Stani Kulechov called it one of the most resisted proposals in Ethereum’s history. His objection was financial rather than ideological: a staking yield engineered to trend toward zero would weaken the predictable cash flow institutions prize in ETH and compress positive-carry strategies such as lending and liquid-staking loops. “Ethereum should not be punished for its growth,” Kulechov argued. Mike Silagadze of ether.fi lined up alongside him, and the opposition reached across the builder and treasury class that had quietly become ETH’s marginal buyers.

The authors read the room. Rather than push a contested monetary change through fork scoping, they withdrew it and asked for a dedicated process, which is where the issuance debate now lives. The near-term consequence is that the only concrete lever capable of restoring protocol-level scarcity has been set aside, perhaps for a year, perhaps for good. If ETH is going to feel scarce in 2026, the market will have to make it so.

Glamsterdam scales the chain, and that works against the burn

If the issuance lever is parked, could the next upgrade at least revive the burn? The timing invites the question. Glamsterdam, Ethereum’s next hard fork, went live on the Sepolia testnet on 6 October, as the Ethereum Foundation announced. It bundles enshrined proposer-builder separation (EIP-7732) and block-level access lists (EIP-7928) among roughly 18 proposals, with a second testnet, Hoodi, due later in October and a mainnet date still pencilled in loosely for the fourth quarter. The headline for users is throughput: a proposed gas limit of 200 million, up from 60 million, made safe by validating transactions in parallel.

None of that touches issuance, and it cuts against the burn rather than for it. EIP-1559 targets blocks that are roughly half full; when capacity triples, the same demand fills a smaller share of each block, so the base fee drifts lower and less ETH is burned per transaction. More blockspace is good for fees in the sense users care about and bad for the burn at the same time. Scaling only lifts the burn if activity grows fast enough to fill the extra room, which is the opposite of what cheaper blockspace tends to produce in the near term.

Karim AbdelMawla, a senior researcher at 21shares, put the implication plainly in the firm’s 2026 Ethereum outlook: ETH “increasingly behaves as a leveraged claim on ecosystem activity rather than a pure monetary asset.” Lower fees reduce the burn unless activity grows enough to compensate, he wrote, which leaves net issuance modestly positive through low-fee stretches. Read next to EIP-8363’s withdrawal, the message is consistent: Ethereum’s roadmap is pointed at scale, and the scarcity that scale erodes will not be patched by the protocol. It has to come from demand for the asset itself.

Scarcity is now a market trade

If neither issuance nor the burn will tighten supply, scarcity has to come from somewhere else, and in 2026 it comes from three places. Coins get bonded into staking, where they cannot trade. They get bought by corporate treasuries that hold rather than sell. And they get wrapped inside spot ETFs that custody the underlying. Each of those removes ETH from the pool that can actually reach an order book, which is why exchange reserves keep setting new lows even as total supply grows.

The catch is that all three are choices, not rules. A staking position can be exited, a treasury can stop buying, an ETF can be redeemed. A lock holds only as long as its holder decides to keep it locked, which makes ETH’s scarcity reflexive. When the price is rising, locking looks like the smart move, the float tightens, and the rally amplifies; when the price is falling, the same logic can run in reverse. The furious August rally and the ugly October selloff were the same thin-float mechanism pointed in opposite directions.

One warning before the detail: these buckets overlap, so you cannot add them up. BitMine’s treasury ETH is, in large part, also staked ETH; some ETF sponsors stake as well. They are three lenses on the same shrinking float, not three separate piles. With that caveat in mind, here is how each lock looked as October wore on.

Lock one: staking at a record, yield at a floor

Staking is the heaviest weight on the float. The share of ETH bonded to validators set a record near 35.9% of supply this autumn, roughly 43 million coins, according to Finbold, and it climbed all year even as the reward for staking fell to a three-year low, around 2.5% to 2.7% before MEV tips. That combination, more capital chasing a smaller yield, only makes sense if staking is being driven by something other than the headline rate: the convenience of liquid-staking tokens, ETFs and treasuries that stake by default, and, for most of the cycle, a risk-free rate low enough that 2.6% in ETH looked acceptable.

That last support is the one under strain. With the Federal Reserve’s target at 3.75% to 4% and the ten-year Treasury yield above 5%, a dollar parked in government paper now out-earns ETH staking by a wide margin, in dollar terms, and without the price risk. The case for locking ETH at 2.6% is no longer the rate; it is the belief that the coin itself will appreciate. Mike Silagadze of ether.fi has argued the structural version of this for months: that the people who stake ETH are long-term holders who were not going to sell anyway, so the lock is stickier than the yield implies. He may be right, and the reserve data supports the stickiness so far.

Concentration is the complication. A single provider, Lido, has historically accounted for somewhere between a fifth and a quarter of all staked ETH, and the mix of who stakes, and through whom, shapes how fast the lock could loosen if sentiment turns. Readers weighing where to stake can compare the trade-offs in our look at Lido, Rocket Pool and Frax. For supply, the number to watch is the validator exit queue: as long as it stays near empty, the biggest lock is holding. If the yield gap keeps widening and the queue starts to fill, the largest reservoir of locked ETH becomes the largest source of returning float.

Lock two: treasuries, and the buyer at the exit

The second lock is newer and far more concentrated. Roughly three dozen public companies now run an ETH treasury strategy, holding somewhere between 7 and 8 million coins between them, but one name dominates: BitMine Immersion, chaired by Fundstrat’s Tom Lee. BitMine holds more than 6 million ETH, about 4.9% of supply, and stakes just over 5 million of it, earning around $336 million a year at a 2.6% yield, per CoinDesk. Since launching the strategy in mid-2025 it has bought ETH almost every week, which made it the single most reliable source of demand in the market.

That buyer just announced its own finish line. Speaking at TOKEN2049 on 7 October, Lee said BitMine would stop accumulating once it reaches 5% of supply, about 6.105 million ETH. “We only need to get another 100,000 ETH to get to 5%. Now we’re going to stop,” he said, before framing the pace of the run: “We thought this would take five years. It took us a little over a year.” At the previous week’s buying rate, closing that gap of roughly 100,000 ETH, about $194 million, would take six or seven weeks. BitMine’s own shares fell 6% on the remarks, because the market understood what they meant for ETH.

The treasury model is a flywheel: a company issues stock at a premium to the value of its coins, uses the cash to buy more coins, and the larger stack supports a higher share price that funds the next raise. It is a powerful bid while it spins, and it is only a bid while it spins. BitMine has not said it will sell after hitting 5%, and holding is not selling. But a lock that stops growing stops absorbing new supply, and the most dependable marginal buyer in the ETH market has now told everyone the date it intends to go quiet.

Lock three: the ETF bid in reverse

The third lock is the one Wall Street built. US spot Ethereum ETFs hold about $15.2 billion in net assets, a channel that did not exist two years ago and that spent most of 2026 pulling ETH off the market one creation at a time. These products also matter for a reason specific to the United States: the Securities and Exchange Commission, alongside the Commodity Futures Trading Commission, clarified in 2026 that ETH staking rewards are not securities, which is what allowed spot ETFs to stake their holdings and gave corporate treasuries the confidence to operate at scale. That regulatory door is what made the entire market-set-scarcity story possible.

In October the door started swinging the other way. Ethereum ETFs ran a streak of consecutive outflow sessions that stretched past a week and drained on the order of $700 million, with BlackRock’s ETHA responsible for about 88% of one week’s $542 million in redemptions, per KuCoin’s flow data. An ETF is a pass-through of sentiment: when money comes in, the sponsor buys and locks ETH; when money leaves, the sponsor sells it back into the float. That symmetry makes the ETF the most fickle of the three locks, the one most likely to flip from absorbing supply to adding it, and in October it flipped.

Put the three locks together and the picture is coherent. Staking is huge but newly rate-sensitive, treasuries are large but topping out, and the ETF bid has reversed. None of them has broken. All of them moved from tailwind to question mark at the same time, which is precisely the condition under which a thin float stops protecting a price and starts punishing it.

The vanishing float, and the double-count trap

The cleanest single measure of the float is the amount of ETH sitting on exchanges, ready to sell, and that number has collapsed. Reserves across all exchanges fell to about 14.88 million ETH, an eleven-year low, down more than 6 million since the middle of 2025 and less than half the roughly 35 million held at the 2021 peak, according to CryptoQuant data reported by Finbold. On that basis only about an eighth of all ETH is realistically available to hit the market on short notice; the rest is staked, in treasuries, in ETFs, or in cold storage.

The bullish reading is straightforward, and analyst Ali Martinez has made it: falling reserves plus rising institutional demand “could create a supply squeeze that may drive ETH higher,” he told Finbold. Fewer coins available to buy, demand steady or rising, and the price has to clear higher to find sellers. It is the same logic that drove the August rally, when a thin float met a wave of short covering and ETH leapt around 20% in a matter of days.

But a thin float is a knife with two edges, and the double-count trap hides the second one. Because the locks overlap, the comforting image of ETH being steadily and permanently removed is partly an illusion; the same coins show up as staked, as treasury holdings, and sometimes as ETF assets. More important, a low reserve number means it takes very little selling to move the price, not just very little buying. When reserves sit at an eleven-year low and the marginal buyers pause, a modest amount of returning supply can swing the market hard. Scarcity amplifies rallies and selloffs with equal enthusiasm.

October was the stress test

October supplied the live demonstration. On 7 October, a day after Glamsterdam reached Sepolia in a textbook case of selling the news, about $400 million of leveraged long positions were liquidated in roughly twenty minutes as ETH broke below $2,600, as MoneyCheck reported. A thin float that had amplified gains on the way up amplified the air pocket on the way down; with the ETF bid gone and BitMine coasting toward its cap, there was little standing beneath the price.

Then the macro delivered the second blow. On 14 October a hotter-than-expected inflation report, with headline CPI at 3.7% and the core rate at 2.6%, both above forecasts, pushed ETH down almost 6% toward $2,360. Hot inflation is the opposite of what a yield-sensitive asset wants, because it keeps the risk-free rate high and the opportunity cost of holding a 2.6% coin painful. All three locks felt it at once: stakers staring at a worse rate gap, treasuries near their ceiling, and ETF holders heading for the door.

The Federal Reserve meets on 27 and 28 October, with its target at 3.75% to 4% and markets leaning toward a hold rather than a second straight hike. For ETH the meeting matters less as a rate decision than as a referendum on how long the risk-free rate stays above the staking yield. The lesson of the month is the thesis of this piece: once scarcity is a market trade rather than a protocol feature, scarcity alone does not hold a price up. It is necessary, not sufficient. You also need demand, and in October the demand blinked.

ETH scarcity versus Bitcoin scarcity

This is where ETH and Bitcoin have genuinely diverged, and the difference is easy to miss because both are described as scarce. Bitcoin’s scarcity is scarcity by protocol. There will be 21 million coins, the issuance halves on a fixed schedule, and no meeting of developers or validators can vote that away. The supply curve is indifferent to price, to demand, and to how busy the chain is; it is the one variable in crypto that genuinely does not care what you think. That quality is what lets people model it with tools like the stock-to-flow framework, however well or badly those models have held up.

ETH’s scarcity is now scarcity by policy, and in 2026 that policy was handed to the market. With issuance left untouched and the burn structurally weak, how scarce ETH feels depends on staking, treasuries, and ETFs, all of which respond to price and sentiment. When demand is strong, ETH can tighten faster than Bitcoin, because the locks compound: a rising price pulls more coins into staking and treasuries, which thins the float, which lifts the price. When demand fades, the same machinery runs backward in a way Bitcoin’s supply simply cannot. ETH’s scarcity is conditional; Bitcoin’s is not.

This is not a verdict on which asset is the better bet, and the gap matters as much for forecasts as for philosophy; the 2026 bull cases for both assets lean on tightening supply, as our survey of 2026 Bitcoin price targets lays out. The point is that ETH cannot be modeled like a hard-money commodity, because its scarcity is a behavior that can stop. Anyone extrapolating the shrinking float into a one-way price case is extrapolating a choice, not a constant.

From monetary asset to a leveraged bet on activity

If ETH is no longer a coin whose scarcity is guaranteed by code, what is it? The 21shares framing, a leveraged claim on ecosystem activity, is the most useful answer going into 2027. Strip out the automatic deflation and ETH’s value rests on two things: demand for Ethereum blockspace, and whatever monetary premium the market still assigns the asset for being the reserve collateral of its own economy. The first of those is measurable, and it is growing. Stablecoins on Ethereum reached about $156 billion, up 22% year over year, and the network captures roughly 47% of the $34 billion tokenized real-world-asset market, per 21shares.

The problem for the supply story is where that activity lives. A stablecoin transfer or a tokenized-treasury trade increasingly settles on a layer-2, where it pays a rollup a tiny fee and burns almost no mainnet ETH. The economic activity is real and compounding; the ETH it destroys is not. Growth in usage and scarcity of the token have come unbundled, which is the uncomfortable core of the leveraged-claim idea: ETH is levered to activity, but the leverage runs through fees and demand for the asset, not through a shrinking supply. The question of whether a network’s token actually captures the value its ecosystem creates is not unique to Ethereum, as our look at Akash and the AKT burn shows for a very different corner of crypto.

That reframing also tells you where to look for a burn revival, if one ever comes. It would take sustained, fee-heavy demand on the main chain itself, the sort generated by heavy stablecoin settlement and on-chain trading during volatile markets, the mechanics of which we cover in our piece on stablecoin AMM design. Absent that, the base case is a chain that processes ever more value while minting slightly more ETH than it burns, and a token whose scarcity is a market mood rather than a monetary law.

Three scenarios into 2027

Because scarcity is now a demand story, the forecasts that matter are really forecasts about the three locks. Here are three plausible paths into 2027, each defined by what the market does rather than by what the protocol changes.

Five dials will tell you which path is winning long before the price confirms it. Watch ETF flows, where a return to steady inflows would mark the ETF lock turning back on. Watch exchange reserves; a flattening or a bounce off the eleven-year low would signal coins returning to sell. Watch the validator exit queue, the earliest read on whether the yield gap is finally pulling stakers out. Watch BitMine’s march to 5%, which fixes the date the most reliable buyer goes quiet. And watch the issuance-policy process the EIP-8363 authors asked for, because that is the only venue where protocol-made scarcity could return.

The through-line is that Ethereum spent 2026 settling a question it will now have to live with. The protocol will not engineer scarcity; it chose not to, twice, by shelving the issuance cut and by shipping a scaling fork that cuts the other way. What is left is a market that has quietly locked up most of the supply and a float thin enough to move on a single headline. That is a bullish structure in a bull market and a fragile one in a selloff, which is the honest description of ETH’s supply picture as 2026 heads into its final stretch. Scarcity is real, but it now has to be earned, one buyer at a time.

Frequently Asked Questions

Is Ethereum inflationary or deflationary in 2026?

Ethereum is mildly inflationary in 2026. The protocol issues roughly 1,700 ETH a day to validators while burning only 50 to 70, so total supply grows by a few tenths of a percent a year. The deflationary ultrasound-money era ended after the Dencun upgrade moved most activity, and most of the fee burn, onto layer-2 networks.

What happened to EIP-8363?

EIP-8363, the Tapered Issuance Burn, was withdrawn from the Hegota upgrade on 1 October 2026. Its authors said the issuance question was too important to settle inside a routine fork and moved it to a dedicated process running into 2027. For now, ETH issuance, staking rewards, and validator economics are unchanged.

Does the Glamsterdam upgrade change ETH supply?

No. Glamsterdam is a scaling upgrade that adds enshrined proposer-builder separation, block-level access lists, and a higher gas limit; it does not touch issuance. If anything it works against the burn, because more blockspace tends to lower fees and lower fees burn less ETH per transaction.

Why are ETH exchange reserves so low?

Staking, corporate treasuries, and spot ETFs have absorbed ETH for over a year, pulling reserves to about 14.88 million ETH, an eleven-year low. That shrinks the sellable float and underpins the supply-squeeze thesis, but the locks overlap and can reverse, so low reserves cut both ways: they also mean small amounts of selling can move the price sharply.

What could make ETH scarce again?

Three things could tighten ETH supply: sustained, fee-heavy demand on the main chain that revives the burn, a renewed issuance cut through the policy process the EIP-8363 authors requested, or the market locks continuing to absorb more ETH than holders release. All three are market or governance outcomes now, not automatic features of the protocol.

Priya Reddy covers Ethereum, staking, and digital-asset markets for HOGE Wire.