Ethereum (ETHUSD)

[ap17]

ETHEREUM GAS FEES PLUMMETING 📉
BREAKING: Record Drop in Ethereum gas fees marks historically bullish signal for ETH

ETH
Ethereum gas fees have been in free-fall since March 2024.

And now they’ve just crossed their lowest point in the last 5 years…

What’s going on?

Gas fees
A quick side note for those of you who are new to crypto:

Gas refers to the fees a user must pay to perform a transaction on the Ethereum network.

And there’s a clear reason why gas fees are plummeting.

Right now, there simply isn’t that much demand for Ethereum block space.

HOWEVER…

That doesn’t mean that the Ethereum network is dying.

In fact, that couldn’t be further from the truth.

Transaction count
Layer 2 transaction count

Layer 2 networks have been popping off this year.

These L2’s are built on top of Ethereum with the aim of reducing transaction fees and increasing transaction speed.

Essentially a MUCH cheaper and faster way to interact with the Ethereum network.

And as you can see from the chart above, transaction counts have never been higher. (they’re just taking place on L2’s instead of the mainnet)

Taking a look at Ethereum’s Transactions per second (TPS), we also observe the same trend.

When taking all Layer 2’s into account, Ethereum’s TPS has never been higher.

Ethereum is actually processing 26.78x more transactions per second then when it launched.

That’s massive.

Scaling factor
BUT…

Due to the way Ethereum works, lower gas prices mean less ETH being burnt.

(a portion of every gas fee is permanently removed from the ETH supply)

Which results in Ethereum becoming inflationary.

And that’s exactly what is going on right now.

Over the last 30 days, ETH has been inflationary at a rate of 0.612% per year.

inflationary
A steep drop in gas fees could also be a bullish sign…

That’s what Bitget Research’s Chief analyst Ryan Lee believes:

“Every time ETH gas fees drop to rock bottom, it has often signalled a price bottom in the mid-term… ETH prices tend to strongly rebound after this cycle, and when this moment coincides with an interest rate cut cycle, the market's wealth effect is full of possibilities.”


Ryan Lee, Chief analyst at Bitget Research
Could Ethereum be about to explode? 🚀