The post Ethereum Gas Fees Hit Five-Year Low: Potential Price Bottom in Sight appeared on BitcoinEthereumNews.com.

Recent data reveals that Ethereum’s gas fees have reached their lowest point in five years. This decline is primarily due to increased layer-2 activities and the latest network upgrades. “Despite demand drivers like spot ETH ETFs, this growing supply could dampen potential price increases in the near term,” reports Kaiko. Learn about the current state of Ethereum’s gas fees, its impact on supply, and prospective price movements in this in-depth analysis. Significant Decline in Ethereum Gas Fees Ethereum’s network has been experiencing a remarkable reduction in gas fees, reaching its lowest levels since 2019. According to Etherscan’s Gas Tracker, the average fee on layer-1 Ethereum is now just 2.15 Gwei, approximately $0.13. This significant reduction is attributed to heightened layer-2 activity and recent network upgrades, specifically the Dencun upgrade implemented in March 2023. The enhanced efficiency of layer-2 solutions has substantially lowered the transaction fees, making Ethereum more accessible for various use cases. Implications for Ethereum Supply The reduction in gas fees has far-reaching implications on Ethereum’s overall supply and its pricing dynamics. Kaiko, an industry research firm, has highlighted potential concerns over Ethereum issuance due to the lower gas fees. With decreased fees, there is less ETH being burnt, which could affect its deflationary status. The research indicates that the growing supply might offset potential price increases despite high demand drivers, such as spot ETH ETFs. Dynamics of Ethereum Supply Post-April Since April, there has been a noticeable increase in Ethereum’s total supply. Data from ultrasound.money shows that ETH supply has risen by 0.2% from 120.063 million to around 120.286 million ETH, approximately 223,000 additional tokens. This increment is valued at roughly $591 million, based on current spot prices. While the supply increase is a concern, it’s worth noting that Ethereum’s overall supply still remains less than it was…

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Filed under: News - @ August 20, 2024 9:24 am