Over the weekend, Ethereum daily network fees surged above Bitcoin for the first time in a while. With the Ethereum network experiencing congestion, it has put pressure on overall fee infrastructure. We take a look at the Ethereum data and further explain why this is happening. 

Ethereum Daily Network Fees 

Over the weekend ( June 6th ) , Ethereum daily network fees hovered above Bitcoin. This was a notable event since it’s historically been quite rare. On June 6th, ETH almost cracked $500K in daily fees compared to Bitcoin which was only around $302K. The chart below pulls data for the last month. Despite Ethereum daily network fees trending up, June 6th was the first time they surpassed Bitcoin in the last month.

If we pull data on a year to date basis, we can quickly see that Ethereum has only done this one other time in March of this year. When this happened in March, Ethereum was also experiencing another situation where network congestion was elevated. What is causing the elevated fee structure?

Market Catalysts 

In a recent market report by Visionary Financial, we outlined that Ethereum transaction counts were higher than XRP for the first time since July 2019. At the time, it was believed that the exponential growth in stablecoins were fueling the transaction levels. Since then, the activity has put a lot of pressure on the network. It’s no coincidence that Ethereums mempool has been backed up, while the stablecoin markets continue to expand. As it was recently discussed, stablecoins leveraging the Ethereum blockchain include Tether, trueUSD, Paxos Standard, Gemini Dollar, USD Coin, Binance USD, and others. The expanded network activity has stressed out the ETH blockchain, resulting in elevated fees.

We can also see that Bitcoin network fees have been falling substantially the last month. The hype leading up to the Bitcoin halving seems to be diminishing. With Bitcoins hash rate starting to stabilize, it seems like miners with more resources were able to jump into the mix. Due to more efficiency behind transaction processing, BTC fees have been falling.

What Ethereum Investors Are Looking For 

Despite the elevated fees, investors believe this will be a temporary issue on the network. It’s believed that the “ETH 2.0” upgrade will address these issues. Moving to a Proof-of-stake consensus will allow the ETH blockchain to scale into new horizons. Opposed to the current proof-of-work network, ETH will now have the ability to drastically decrease the inefficiencies around cryptographic work. In addition, “sharding” will be implemented to leverage parallel processing to increase overall capacity levels.

Ethereum Price 

Despite the surge in network fees, Etherum has still outperformed Bitcoin the last 7 days, showing +1.40% growth compared to Bitcoins +0.50%. At the time of this reporting, the price of ETH is $243.15 with a total market capitalization of $27.055 billion.

Image Source: Pixabay 

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