Crypto analytics firm IntoTheBlock reports that Ethereum transaction volume is down 80 percent from the same period last year, due in large part to plummeting interest in NFTs.
Other important metrics, such as fees collected and daily active addresses, mirror the drop in transaction volume.
This pattern is similar to what was observed during the last bear market where activity declined significantly across the entire crypto market.
Interest in NFTs Drops, Prices Follow
Following the huge NFT hype of the early part of 2022, interest has since declined enormously with Google search data showing a 75 percent reduction in searches for the term NFT, contributing significantly to the drop in transaction volume on Ethereum.
Similarly, NFT prices crashed in May with most collections recording decreases of at least 50 percent, significantly more than ETH itself, which dropped about 30 percent over the same timeframe.
ETH HODLers Accumulate During Crashes
As ETH transactions and its price have plunged, long-term HODLers (addresses that’ve been holding ETH for over a year) have started to accumulate and now hold over 50 percent of total ETH supply. It’s the first time this mark has been reached since 2020.
In the latter part of 2021 and into early 2022, HODLers had been selling. But they’re now buying the dip with a view to maximising their gains when (they hope) the market recovers.
ETH 2.0 Staking Grows
According to IntoTheBlock, the single largest holder of ETH is currently the Ethereum 2.0 staking contract, which now holds over 7.84 million ETH.
Of course, HODLers of many other cryptocurrencies also have the option of staking and earning rewards – for example, late last year Swyftx became the first Australian-based exchange to offer staking for the popular Solana blockchain.
In the Australian context, over 80 percent of crypto investors say they’re HODLers, which is comparable to figures from many other parts of the world.
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