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Ethereum Network Activity Reaches All Time High As Price Stalls

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Ethereum Price: $202.27
Ethereum Price (BTC): 0.022782BTC
ETH Leveraged in DeFi: 2.65M (2.39% of circulating supply)
Market Cap: $22.47B
ETH Network Dominance*: 50.75%
7 Day Candle**: $211.49 / $215.56 / $191.37 / $202.27

If there was ever any doubt that the Ethereum blockchain was the single most dominant force in cryptocurrency, recent weeks and months will have had it quashed.

The Ethereum blockchain is beginning to snowball, picking up a tempo that is quite frankly overwhelming and challenging to keep pace with. Fortunately, the sheer enormity of what is going on can be summed up and visualized by Ethereum’s daily gas used; a metric that signals demand for the Ethereum blockchain and one that hit a new all time high on May 23rd.

From etherscan.io

This growth in gas used follows the issuance of stablecoins on Ethereum (to the tune of ~$4 billion) and the continued growth of decentralized financial applications that are seeing tens of thousands of transactions each day.

Bitcoin is also gaining traction on Ethereum with over $30 million issued on Ethereum (WBTC) since the start of 2020 and other BTCe (Ethereum-issued Bitcoin) tokens beginning to make headway.

MakerDAO founder, Rune Christensen, whose platform recently added WBTC as a collateral asset, described DeFi as “an economic vacuum that will eventually attract almost all value to the Ethereum blockchain.”

From defipulse.com

The total number of Ethereum transactions are also rapidly approaching highs that have not been seen since the ICO bubble of January 2018. This time however, the growth is being spurred not by ICOs but by stablecoin usage and decentralized exchange from the likes of Kyber, Uniswap, dYdX and aggregators like 1inch.

Ethereum transaction count compared to Bitcoin

Even the Winklevoss twins seem to agree. An interview with the pair on Camila Russo’s, The Defiant podcast, revealed that the famous Bitcoin billionaires are also large holders of ETH. Perhaps unsurprising, given their issuance of the Ethereum-based stablecoin, GUSD in 2018.

An excerpt from The Defiant's interview

The result of all this activity is a giant increase in the cost of transacting on Ethereum as blocks reach full capacity. Full blocks and high fees are a significant deterrent for developers and users alike, reigniting the age-old “block size” debate. The community is now in discussion about whether to raise the cap (as has been done many times in the past) or to retain the current limit in an attempt to spur on the Layer 2 (off-chain) scaling that is fast-approaching mainnet.

Ethereum Price Stalls

While Ethereum trades at 14.63% of its all time high, the blockchain’s usage metrics are approaching and surpassing previous records. Under these circumstances, the stagnation of Ethereum’s price is hard to fathom; it as though ETH is correlating more with Bitcoin than it is its own fundamental value.

Perhaps this is a result of Ethereum’s nuanced and complex value proposition, one that cannot simply be described as “digital gold” but instead as a diverse and – to some extent – unknown entity.

The top 10 cryptocurrencies are all built on Ethereum

The Ethereum gravity well – despite consuming all things – is not yet capturing value in its underlying token, ETH. Is this the result of poorly functioning “tokenomics”, or an extension to a long history of asymmetric information that will eventually catch cryptocurrency investors by surprise.

* calculated as: (ETH Market Cap / Ethereum Network Market Cap)
** open / high / low / close

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Nick Cannon
Nick Cannon Founder