Ethereum (ETH) gas prices have decreased by a significant 72 percent since their peak in January. This decrease in demand stems from the price dropping below US$3,000 yet again.
At the beginning of January, gas prices jumped due to the surging volume for NFTs but have since decreased following a bearish price drop below US$3,000. The movement can be mainly attributed to the overall crypto market downturn, following negative macro sentiments, but most of all due to the threat of war in Ukraine. Although ETH has seen significant price drops, there is no lack of positive development surrounding the ecosystem.
Earlier this year, high ETH gas prices and rising network congestion forced developers to build on layer 2 solutions.
The TVL (total locked value) in DeFi (decentralised finance) remains above US$200 billion, despite recent market downturns from US$250 billion in November 2021. Levels correlate with ETH’s all-time high market value of US$4,878 on November 10.
As previously mentioned, sentiments surrounding the ETH ecosystem have not dissipated. That KPMG in Canada has added ETH to its balance sheet shows there is a clear recognition of ETH as an investment asset, even for risk-averse enterprises.
Small Ether Holders Increasing
Adding to ETH’s success is the fact that Ethereum adoption is not only limited to crypto whales and big players. According to data, the number of addresses holding between 0.1 and 1 ETH is at an all-time high. In the span of a year, the number of these addresses increased by 98 percent and at the moment they hold 1.78 million ETH collectively – up 4.54 percent in one month.
At the other end of the argument, the NFT market has slowed down since reaching its peak levels in January 2022. Although this year has seen record-breaking NFT market activity, market data suggests that the number of sales is down from almost 64,000 sales per day in mid-January to 24,000 by the end of last week.
Since the price of ether dipped below US$3,000, the demand to make transactions on the ETH blockchain has remained relatively low. And as the demand for transactions declines, so too the market price of blockspace. According to data, transaction fees are officially at their lowest since July 28, 2021.
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