Crypto: Ethereum transactions fall by 55%, is the end near?

Summer 2024 marks a notable slowdown for Ethereum, the world’s second-largest crypto. Recent data reveals a significant decrease in trading volume and the number of transactions on its network during August.

Activity Slump on the Ethereum Network

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 proved to be particularly bleak for Ethereum. According to Block data, the seven-day moving average of daily volume dropped by about 55% compared to the previous month. Daily economic throughput drastically decreased, 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 not seen this low since May 2020.

Factors Behind This Slowdown

Several factors can 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 slower period for financial markets. They note, however, that the decline is less pronounced than in previous years.

Another key factor is the decrease in institutional interest. Spot Ethereum ETFs underperform compared to their Bitcoin counterparts, indicating a lack of enthusiasm from institutional investors. Valentin Fournier, analyst at BRN, even recommends favoring Bitcoin, expecting Ethereum to continue lagging in the coming weeks.

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