A report from crypto investment fund Grayscale on Thursday predicted that a proposed upgrade to the Ethereum blockchain, if implemented, would create "a positive feedback loop for Ether's price". Per the upgrade, Ethereum Improvement Proposal (EIP) 1559, the Ethereum blockchain would use Ethereum transaction fees to buy ETH on the open market and then destroy it, reducing ETH's overall supply.

"It's like a company that earns a profit and buys back shares," Tim Ogilvie, CEO of Staked, an Ethereum infrastructure services company, told Decrypt. Burning billions of dollars in ETH could pump up the price of ETH, he said. "The net effect is that the remaining shares increase in value because the supply is smaller." "It's extremely bullish," said Ogilvie. He estimates that at ETH's current market cap, close to $200bn, the network would burn 1-4% of the supply each year. "If you like BTC's hard cap at 21 million tokens, you'll love ETHs declining supply."