Crypto: Ethereum Transactions Drop 55%, Is the End Near?

The summer of 2024 marks a notable slowdown for Ethereum, the world’s second-largest cryptocurrency. Recent data reveals a significant decrease in trading volume and transaction counts on its network during the month of August.

Ethereum network activity down

The situation is worrying for the second largest crypto. Ethereum is facing a growing disinterest from institutional investors, accompanied by a significant slowdown in transactions.

August 2024 has been a particularly gloomy month for Ethereum. According to the data The seven-day moving average of daily volume has fallen by about 55% from the previous month. Daily economic throughput has declined drastically, from $6.56 billion at the end of July to just $2.9 billion currently.

This downward trend is also evident in the number of daily transactions. Last Sunday, the Ethereum network recorded only 1.07 million transactions, its lowest level in several months.

This is a significant drop compared to the peak of 1.32 million reached last March. Cumulatively, August has so far recorded 27.27 million transactions, a figure that has not been this low since May 2020.

The factors behind this slowdown

There are several factors that could explain this drop in activity on Ethereum. Coinbase analysts point out that this phenomenon is part of a seasonal cycle, with summer traditionally being a quieter period for financial markets. However, they note that the drop is less pronounced than in previous years.

Another key factor is the decline in institutional interest. Ethereum spot ETFs are underperforming their Bitcoin counterparts, reflecting a lack of enthusiasm from institutional investors. BRN analyst Valentin Fournier even recommends favoring Bitcoin, expecting Ethereum to continue to lag in the coming weeks.

Despite these worrying indicators, some experts remain optimistic about the long term. A recent prediction even suggests that Ethereum could surpass Bitcoin in market capitalization by 2029.