The popularity of decentralized finance (DeFi), which has seen Ethereum fees rise to new heights, had led to Ethereum fees reaching record highs. The transaction volume increased with network activity. These effects persist even in bear market. However, fluctuations between high and low are becoming more common. ETH fees and transaction volume have both fallen to new lows.
Ethereum transactions starting at $0.5
The lowest Ethereum transaction fees this year has been at the bottom. The prices of gas, which fluctuated between high and low for the past year seem to have settled at lower levels. Gas costs on the Ethereum network fell to its lowest June level in the early hours. The transaction cost was only 19.8 Gwei, or about $0.5 for the Ethereum network at the time.
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This means there has been a more that 80% decrease in the price of gas from last week’s peak, which was 151.3 Gwei per transactions. As Messari shows, this coincides with a decrease in the number of transactions on the network.
The data aggregation website shows that Ethereum’s transaction volume is down more than 80% from its monthly high. The real transaction volume on Ethereum was more than $10 Billion as of the 13th June. The real volume today was $570 million. This is the lowest value it’s been in a month.
Price of Ethereum falls to $1.179| Source: ETHUSD on TradingView.com
In June, supply also took a dip. At the close of June, 8.6% of total ETH supply was in DeFi. At the time this is written, 8.3% of DeFi’s total ETH supply was remaining. This means the dollar value in DeFi is currently at less than $10 billion, compared to $30 billion three weeks prior.
ETH Profitability Tanks
There are some encouraging signs for investors, given the recent recovery in Ethereum’s price. However, profitability is not as high this year than it was last year. In 2021, more 80% of ETH investors were making profit. This was not surprising considering that November saw the digital asset reach a record high.
There is however a substantial drawback from this point. Data from IntoTheBlock shows a significant drop in profits for ETH investors. 52% wallets currently are in the green and 47% in loss. This leaves only 2% in neutral territory which continues to be shaky.
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Investors are more worried about the future growth of the network. All of the new competitors in the DeFi/NFT space are the main reason. Solana in particular has made Ethereum look like a loser in the NFT space, prompting a shift towards the network with faster transactions and lower fees.
Ethereum continues to be the market leader in cryptocurrency market capital. At the moment, Ethereum is trading at $1200. The crypto currency has a market cap $149 billion.
Featured image taken from CryptoSlate. Chart by TradingView.com
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