Ethereum (ETH) Fees Plunge 69% as This Metric Drops to All-Time Lows
According to on-chain analytics firm Santiment, Ethereum’s average fees are on the decline. It reports that Ethereum fees have come back down to earth after reaching a 2023 high of $14 per ETH transaction in early May.
💸 #Ethereum‘s average fees have come back down to earth after its 2023-high $14 per $ETH transaction in early May. More affordability encourages more utility. Additionally, #crypto‘s #2 asset is at an #alltimelow 9.9% on exchanges as #selfcustody reigns. https://t.co/fXixRfgRdY pic.twitter.com/nj2p1UAMqU
— Santiment (@santimentfeed) May 31, 2023
Santiment believes this is a plus for the Ethereum network as affordability brings on more utility.
According to recent research by Glassnode, two new sectors — GameFi and staking — have arisen in the last two years within the Ethereum ecosystem. Investor interest in each sector has ranged in intensity.
One of Ethereum’s most well-known use cases is DeFi. GameFi gained popularity and, in the middle of 2022, nearly surpassed DeFi. Since the start of 2023, the staking industry has grown.
Often, there are sporadic spikes in gas usage, during which the demand for gas for DeFi frequently doubles. This usually occurs during periods of high market volatility as investors recollateralize, deleverage or get liquidated on their on-chain margined positions.
Not only have ETH fees dropped 69%, but Ethereum is also at an all-time low of 9.9% on exchanges as holders opt for self-custody.
Ethereum exchange balance hits all-time low
In an earlier tweet, Santiment noted that both Bitcoin and Ethereum continue to quietly see more of their existing supplies move into self-custody.
It adds that, though not a perfect indicator, declining coins on exchanges generally hint at future bull runs if given enough time to play out.
As staking uses up the available Ethereum, the amount of Ethereum (ETH) on exchanges has fallen to levels last seen in the early days of Ethereum.
Since the Shapella update was introduced to the Ethereum network, there have been over 4.4 million more coins deposited, signaling that large Ethereum holders are increasingly choosing to generate passive income rather than sell their holdings.
