Ethereum’s gas fees have been plummeting in the last five days as the price of the currency edges toward its all-time high of $4,465, set on Wednesday this week.
At the time of writing, Ethereum trades for $4,626. The average transaction fee is $37.19, marking a 33.5% reduction from Tuesday, when the average gas fee on Ethereum was $56.
On top of that, the network’s hash rate continues to soar to new heights. Hash rate determines the network’s computing power. On Monday, Ethereum’s hash rate hit 812,769 GH/s. By Wednesday that figure ballooned to a new high of 821,207 GH/s, according to Etherscan.
So there’s a lot of new figures to digest, but what do they mean? Although the hash rate has increased, lower transaction fees could indicate lessening demand, and while the price and computing power of Ethereum might be sky-high right now, another metric has dropped off considerably in the last four days: trading volume.
On Wednesday there was just over $21 billion worth of trades made on Ethereum. By Saturday, that figure dropped off significantly: Ethereum had a trading volume of about $14 billion. In that time, Ethereum also lost $10 billion from its market capitalization, which currently stands at around $534 billion dollars.
Still, Ethereum stans will point to the network’s burgeoning NFT scene, an economy which has this year attracted household brands like Marvel, Visa and Budweiser into the fold, alongside NFT-established brands, like NBA and fantasy soccer game Sorare.
The Chicago Mercantile Exchange also announced on Tuesday that it will start trading Ethereum micro futures derivatives in December, enabling traders to make much smaller trades than current Ethereum futures contracts allow.
Ethereum is also laying the groundwork for a major network upgrade. Ethereum 2.0 promises significantly higher speeds, lower gas fees and a much greener carbon footprint.
At the end of last month, Ethereum upgraded its beacon chain. The introduction of staking into the Ethereum ecosystem paves the way for “the merge”–a still unconfirmed date when Ethereum will jettison its energy-intensive proof-of-work consensus mechanism for the greener trappings of a proof-of-stake consensus mechanism.
So demand for Ethereum might have dropped off a little, and a higher hash rate may have reduced the load on the network. But fees rise and fall all the time, and there’s plenty left to look forward to on Ethereum.
