The total transaction fees accrued by the Ethereum network have declined by approximately 50% over the past seven days as on-chain activity has significantly slowed, according to insights from blockchain analytics platform IntoTheBlock.
Ethereum, the second-largest cryptocurrency by market capitalization, is known for its fluctuating gas fees, which typically rise and fall based on network congestion. However, the current decline in transaction fees reflects a substantial slowdown in on-chain activity rather than just a temporary dip. This has raised widespread concerns about decreasing network demand.
Over the years, the Ethereum mainnet has faced significant scalability challenges, prompting the adoption of a rollup-centric roadmap that offloads most on-chain activity to Layer 2 solutions. This shift has also led to the migration of users, protocols, and on-chain activities to alternative blockchain networks such as Solana, Avalanche, and Binance Smart Chain.
The sharp reduction in transaction fees comes amid a broader market cooldown, raising concerns about Ethereum’s long-term scalability, utility, and the potential impact of declining network activity on ETH’s price. Currently, ETH is trading at $1,970 with a year-to-date (YTD) performance of -40%, making it one of the worst-performing major cryptocurrencies.
ETH spot ETFs record $280 million in outflows over nine days
ETH spot exchange-traded funds (ETFs) have experienced an outflow of 142,564 ETH—equivalent to approximately $280 million—over the past nine days, according to crypto analytics platform Coinglass. This development has further fueled concerns among investors and market participants, prompting speculation about the underlying factors driving this capital flight.
Alex DovbnyaThe launch of ETH spot ETFs in 2024 was initially met with optimism, largely driven by the success of Bitcoin spot ETFs earlier in the year. Many expected a similar influx of institutional capital into the Ethereum market.
However, the recent outflows could indicate a shift in investor sentiment or a different market dynamic at play. Despite increasing regulatory clarity in the U.S. and the inclusion of ETH in the country’s digital asset stockpile, these factors have not been enough to halt the ongoing ETF outflows.
Additionally, external macroeconomic factors—such as recession fears, tariff uncertainties, and geopolitical risks—are likely contributing to the sell-off. Institutional investors, who are generally more risk-averse than retail traders, may be pulling back due to these broader concerns.
Vladislav Sopov
Dan Burgin