Ethereum's gas fees plummet to five-year lows, raising concerns about increased ETH supply and potential pressure on its value.
While this reduction in fees has made the network more accessible and affordable for users, it has also sparked concerns about the potential impact on ETH value.
This development is driven by increased activity on Layer 2 solutions and the impact of the Dencun upgrade in March 2024.Since then, fees have steadily declined, with July 2024 recording fees of around $93.4 million. Kaiko’s research suggests that the current month is on track to see the lowest fees.One important consequence of lower gas fees is the reduction in the amount of ETH being burned.
With lower fees, less ETH is being burned, potentially leading to an increase in the token’s supply over time.The reduction in Ethereum gas fees, largely driven by the Dencun upgrade and increased Layer 2 activity, has led to a decrease in the amount of ETH burned through transaction fees. Consequently, the total supply of ETH has gradually increased from 120 million in March 2024 to over 120.2 million currently. This trend has been gradual but consistent, as evidenced by data from Glassnode.Kaiko’s report highlighted that this growing supply of ETH could temper potential price increases in the near term, even in the face of positive demand drivers such as spot ETH ETFs.As of this writing, Ethereum is trading at approximately $2,648, showing a slight increase of less than 1%.
Furthermore, the Relative Strength Index for Ethereum was around 40 at press time, indicating that the market was in a strong bearish trend.Adewale is a full-time journalist at AMBCrypto. While he is increasingly fascinating by the world of blockchain and cryptocurrencies, Adewale holds a degree in International Relations. Besides working on insightful articles that touch upon the crypto-space's hottest issues, he finds joy in supporting Manchester United and Afrobeat music.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Ethereum ETF anticipation spurs market buzz, ETH climbs to $3,499ETH ETF is likely to draw significant investor interest, potentially channeling more capital into the broader altcoin market.
Read more »
Ethereum ETFs get SEC’s thumbs up, but watch out for ETH whales!Ethereum ETFs have been approved and we are exploring whether whales are on the hunt for the incoming wave of liquidity.
Read more »
Ethereum at crucial $2.6k support – Can ETH bears beat the bulls?Ethereum bulls were successful in pushing prices past $2600, but they might be unable to hold on due to the dominant selling pressure.
Read more »
Ethereum: Is there an ‘80% chance’ of ETH crossing $3K in September?Michael van de Poppe foresees Ethereum price crossing above $3K in September after dropping for three consecutive months.
Read more »
Ethereum struggles amid ETH ETF outflows and rising supplyWeak demand for spot Ethereum ETFs and falling network usage has weighed down on ETH price amid rising supply.
Read more »
Ethereum price prediction: How soon can ETH cross $2.9K again?Ethereum has gained close to 30% from the recent lows at $2.1k, but it has not been driven by high spot market demand.
Read more »