As Ethereum undergoes a period of major transformation, transaction fees on the network have just reached a symbolic threshold. For the first time since September 2024, daily fees have fallen below the $1 million mark.
Daily fees on Ethereum fall below the million mark
The Ethereum network registered daily expenses of $731,472 on February 8, for the first time in five months. This situation has only occurred twice since November 2020, the previous episode dating back to the summer of 2024, between August 17 and September 8.
This significant drop in fees highlights several fundamental challenges facing Ethereum. Despite the recent approval of ETFs in the US and Hong Kong, Ether has failed to keep pace with Bitcoin’s upward momentum. One of the key factors behind this underperformance is the steady increase in Ethereum supply since April 2024, which has reversed the deflationary trend set in motion by the September 2022 merger.
At the same time, the strategy of scaling via Layer 2 solutions is revealing its limitations. Although it has effectively reduced congestion on the main chain, it has also led to fragmentation of activity, redistributing a significant proportion of transactions to competing networks. Tron and Solana in particular have done this, even surpassing Ethereum in terms of fees generated over the last three months.
Yet institutional investors seem to see an opportunity in this situation. On February 7, accumulation addresses recorded a record inflow of 330,705 ETH, valued at $833 million, suggesting established confidence in the network’s long-term prospects.
CEO and Editor-in-Chief of Coinpri I have been navigating the waters of Blockchain for 5 years already.
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