After a sad month in June, when it gave up another 45% to close at $ 1000, Ethereum has regained some color by holding over $ 1200 in the past few days. But Ethereum’s trade volumes are still declining, with 1,600 billion less in the second quarter.
Ethereum (ETH) trading volume is low
It seems a long time ago when Ethereum moved more money through its network than Visa.
We will remember thatin 2021, Ethereum traded more than $ 11.6 trillion on its blockchainfar ahead of the Visa network (10,400 billion) and especially far ahead of Bitcoin (4,600 billion).
The crypto-winter continues, and Ethereum it continues to navigate in the area of between $ 900 and $ 1200 for several weeks. But while first – time buyers have made tangible progress against sellers, trade volumes are still at the bottom of the rock.
Based on data from the specialized portal etherscan.ioIt is estimated that almost $ 1.68 trillion was traded on the network during the second quarter of 2022. Almost half as much as in the second quarter of 2021 !
Crypto-winter and Ethereum fall in traffic
The drop in traffic on the Ethereum network is obvious less than 415,000 active launches in the last days of June. You have to go back to November 2020 to get such low values.
June also saw several-year declines in the number of daily transactions. For the number of active addresses, daily transactions fell below one million for the first time symbolic on June 26th.
Again, you must go back to November 2020 (November 29: 993,930) to get equivalent values.
Unexpectedly, this drop in liquidity on ETH also benefits users. As you were told recently, the cost of transactions on Ethereum has dropped significantly in recent months, reaching $ 0.40, which is far from the $ 60 you had to pay in May 2021.
(We will set aside the statistical cancellation of the 1er May, when fees rose to $ 200 in the first virtual land sale of Otherside, metaverse Yuga Labs.)
Burns, staking and The Merge: many factors in place?
Where does this continued drop in Ethereum liquidity come from? First of all, obviously The decline in traded volumes is not exclusive to Ethereum, but is a fundamental trend across all crypto markets.
Prices are falling, and buying investors are showing up much less than in the best months of the past bull run.
Then it may be necessary to link to the long-awaited excerpt of Ethereum for proof-of-bet. In fact, the number of ether locked in an Ethereum 2.0 staking contract is breaking records, peaking at more than 13 million ETH. Glan, more than 10% of ether is withdrawn from circulation !
Finally, the drop in liquidity on Ethereum is also due to the mechanism of burn implemented in August 2021. Due to the EIP-1559 update, approx 3.10 million ETH must in principle be burned out of the 5.40 million produced annually by the miners.
Since January, less than 2.40 million ETHs have been burned.
Given the combined influence of these factors we believe that the decline in the volume of trading on Ethereum is not about to stop. At least until The Mergerscheduled between August and November.
To learn more about Ethereum and the transition to proofs: Discover Ethereum.