The Ethereum blockchain has witnessed a significant increase in transaction volume since the beginning of February, leading to notable changes in network gas fees.
Data shows that the seven-day moving average for economic throughput on the Ethereum blockchain has surpassed $3.55 billion, marking a surge of over 15% from the beginning of the month when it stood at $3.08 billion.
Spike in Ethereum Network Gas Fees
The uptick in transaction volume on the Ethereum blockchain has resulted in a corresponding spike in network gas fees. The seven-day moving average of gas fees has reached a multi-month high of over $11, a level not seen since mid-December 2023.
Gas fees experienced a significant surge on Feb. 9, with total Ethereum network gas fees amounting to 854 Ether on that day, according to YCharts data.
This brings to the fore the position the ETH Foundation held in 2022 when it stated that gas fees come as a result of the demand placed on the network and have nothing to do with the capacity of the network.
Factors Contributing to Gas Fee Surge
Several factors may have contributed to the recent surge in gas prices on the Ethereum network. Notably, the volume of non-fungible tokens (NFTs) traded on the Ethereum network reached its highest level since late February last year.
Analysts predict that by the end of 2026, the price of Ethereum, the native cryptocurrency, will have increased five times.
The current weekly volume of ETH NFT trading has hit a multi-month high of $147.29 million. This surge in NFT trading activity could be a key driver behind the increased transaction volume and subsequent rise in gas fees on the Ethereum network.
Impact on Ether Price
Despite the surge in transaction activity and gas fees, the price of ether experienced a slight decline of 1.9%, falling to $2,476 as of 5:30 a.m. ET. Analysts project that the price of Ethereum will be $6,500 per ETH token in 2024, with the introduction of spot Bitcoin ETFs being seen as a positive step for both Bitcoin and the cryptocurrency industry.