Ethereum roadmap will make ETH price skyrocket - A monetary issuance analysis

The next two major upgrades of Ethereum (The Merge and Sharding) will both change the Ethereum monetary policy to decrease issuance and even make net issuance negative. This will make Ether a strongly deflationary asset, and thus increase its price significantly, assuming all other factors being equal.

Sharding will increase the number of transactions per second that Ethereum can process, but requires that smart contract systems (ie. DAOs and such) and people actually start using it. It's not trivial and will be kind of like using a separate chain where you can't call other smart contracts directly, but have to go through a bridge or at least wait several blocks for the cross-shard calls to settle. Burn increase depends on more transactions being processed and that will only happen gradually once people learn to use shards effectively. But it still has the potential effect of increasing the EIP-1559 burn by a factor as big as the number of shards - 64 shards to start with, according to the latest Eth2 spec.

The bigger effect we will see (and much sooner) is The Merge - estimated to happen in Q1/Q2 2022. From a net issuance perspective, we will continue to burn like we do now. But instead of paying for both proof-of-work miners and proof-of-stake validators like we do now (which is kind of insane by the way), we will stop paying the miners and completely transition to proof-of-stake validator security for the network.

This will be a tremendous change to net issuance. Ethereum currently issues around 12,900 Ether to miners and 1,200 Ether to validators per day. Burn will vary a lot, but in the first week of burn we averaged around 4,600 Ether per day. Not only will turning off proof-of-work decrease issuance by 91%. In an instance, Ethereum net issuance will go from flooding the market with 9,500 Ether (~$37,500,000) per day, to removing 3,400 Ether (~$13,300,000) from circulation per day!

These numbers are ofcause fluctuating according to transaction demand and Ether price and will almost certainly not be the same in 6-9 months. But it does not take a lot of imagination to see how such a radical change in monetary policy will increase the price of Ether.