Crypto Chronicles: Ethereum's Gas Fees Skyrocket to Yearly HighCryptocurrency 2 replies 0 likes 0 votes 146 views
I wanna dive into the latest update on Ethereum and the crypto market. Brace yourselves because the gas fees on Ethereum have skyrocketed to a yearly high! Yeah, I know, it's a bummer for all the Ethereum users out there.
So, here's the deal. In May, digital assets didn't perform as well as other risk assets. Trading volumes hit a two-year low, and the market breadth narrowed. Leverage remained muted too. Bitcoin took an 8% dip, while Ethereum fell 1.5% compared to the S&P 500, which saw a 1% increase, and the Nasdaq, which soared by 6%.
Interestingly, the volatility of Bitcoin dropped to a five-month low, and its correlation with the Nasdaq Composite fell to an 18-month low of 20%. On the other hand, small and mid-cap coins struggled, dropping by 12% and 11% respectively, while large-cap coins only saw a 4% decline.
Now, let's talk about the centralized exchanges. We've witnessed 16 of them withdrawing from certain regions, and guess what? Half of them are from the United States. It seems that the crypto industry is facing challenges when it comes to traditional financing, counterparty exposure, compliance standards, and the rise of DeFi platforms.
Shifting our focus to Smart Contract Blockchains (SCBs), the overall market cap fell by 4% in May. However, Ethereum and Tron stood out as the top performers. While other tokens saw declines ranging from 5% to 35%, Ethereum slipped by a mere 1.5%, and Tron actually gained 11%. Not too shabby, huh?
Speaking of Ethereum, it continued to impress with its on-chain usership metrics. In May, it generated over $438 million in fees, the highest since May 2022. Ethereum's market share of smart contract blockchain fees reached a whopping 80%, again the highest in over a year. However, these fee increases were largely driven by meme coin speculation, causing the average transaction fee to jump from $6.15 in April to $9.79 in May.
But wait, there's more! Ethereum faced some challenges too. A coding error in its consensus software caused network issues, leading to delays in finality on May 12th. Thankfully, Ethereum's multiple consensus clients helped the network overcome these incidents without major consequences. Kudos to them for their quick resolution!
Moving on to Tron, it's been carving out its own market niche, especially in emerging markets. Users have been flocking to Tron for its low-cost access to stablecoins like Tether. In fact, Tron holds around $45 billion worth of Tether on its blockchain, surpassing Ethereum in this regard. Tron's transaction volumes hit an all-time high in May, making it the second most active blockchain after Solana.
Now, let's touch upon Optimism, which unfortunately underperformed in May. It faced token unlocks, a decrease in on-chain activity, and declining operating income. However, despite the challenges, Ethereum Layer-2 solutions like Optimism, Arbitrum, and Polygon have been striving to improve scalability and reduce gas cost.