By Tim Hakki
The average transaction fee on Ethereum is soaring at $51.45, according to data from crypto metrics site BitInfoCharts. The figures show an increase of 2,293% since late June.
Only seven days ago, the average transaction fee on Ethereum was $22.52. This month has been particularly temperamental for Ethereum gas fees. On October 15, the average fee was $45.74, almost double the figure on the first of the month: $23.79.
The price of transactions on Ethereum has been seesawing since the London hard fork back in August, but in spite of wild variations—often between days—the gas fees on the network are trending upwards.
It’s worth noting that BitInfoCharts gives a figure based on average transaction fees recorded from yesterday. On Etherscan, the real-time transaction fee at the time of writing currently averages at $44.33.
Why are fees rising?
Transaction fees rise when demand for Ethereum rises. Last week the prices of Ethereum and Bitcoin both rose in tandem, setting new all-time highs in the middle of the week.
Since then, Bitcoin’s price retreated from $66,930 to $61,683, a drop of about 8%, while Ethereum continued rallying to set a new all-time high of $4,456 yesterday.
The two market leaders often exhibit similar price movements. The combined market capitalization of the global cryptocurrency market is $2.63 trillion. Bitcoin commands $1.1 trillion of that, and Ethereum comes in second, commanding a respectable half a trillion dollars.
The doubling of the average transaction fee on Ethereum from last Saturday to today roughly correlates with trading volumes over the last seven days. Last Saturday, $14.7 billion dollars worth of Ethereum was traded, while yesterday the figure rose to $26 billion.
Ethereum’s explosive price performance and trading activity in the last week could be down to excitement around the blockchain’s latest network upgrade. The Altair upgrade is a step towards Ethereum 2.0—a faster, greener, cheaper and more secure Ethereum network.
Specifically, Altair is designed to facilitate Ethereum’s transition from a network that utilizes a proof-of-work consensus mechanism—where miners with the most computing power validate the most transactions—to proof-of-stake, where the miners who stake the most ETH validate the most transactions.
Evidently, the network still has a little way to go before it can deliver on its promises of cheaper gas fees. Still, today’s price performances are a strong indicator that many are getting on board.