15h05 ▪
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min read ▪ by
Ethereum transaction fees have not been this low since 2020. This drop in costs could be seen as an opportunity for investors. However, the prospects for recovery depend on many external factors.
Decline in Ethereum Fees: Here Are the Reasons
At the time of writing this article, crypto experts estimate fees at around $0.168 per transaction. According to them, this fee decrease results from a significant reduction in activity on the Ethereum blockchain.
Decoding: fewer people are sending ETH or using smart contracts. This reduces competition for transaction confirmations. Consequently, demand decreases. And naturally, fees follow this economic logic of supply and demand.
To support this analysis, Brian Quinlivan from Santiment explains:
When many people use Ethereum, fees go up. With less activity, users don’t need to pay more to speed up their transactions.
An Opportunity for Crypto Investors, But at What Cost?
For some investors, the drop in fees could offer buying opportunities. It indeed lowers the entry costs to interact with Ethereum. However, this drop comes amid an uncertain global economic context.
Reference is made to recent trade measures imposed by Donald Trump. This caused strong volatility in the cryptocurrency market. For example, the ETH price dropped over 12.5% in 14 days.
Scheduled for May 7, the Pectra update could also change the game. This change aims to:
- double the capacity of layer 2 blobs;
- reduce transaction fees;
- allow paying these fees in stablecoins like USDC and DAI.
In other words, these improvements should make Ethereum more competitive and more accessible. Enough to revive the use of the crypto network and significantly boost activity!
The coming weeks are therefore crucial for Ethereum. They will determine whether the current trend is a simple phase of consolidation or the prelude to a stronger recovery.
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My name is Ariela, and I am 31 years old. I have been working in the field of web writing for 7 years now. I only discovered trading and cryptocurrency a few years ago, but it is a universe that greatly interests me. The topics covered on the platform allow me to learn more. A singer in my spare time, I also cultivate a great passion for music and reading (and animals!)
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
