- Ethereum’s network activity stays flat despite a rise in price.
- Staking deposits have mushroomed since Shapella went live.
The market rally of June, fueled by confidence shown in digital assets by financial institutions, resulted in significant gains for Ethereum [ETH] as well. The king of altcoins reversed the losses induced by regulatory hostilities and rose 11% since the news about Blackrock’s application for a spot Bitcoin [BTC] ETF went public.
Is your portfolio green? Check out the Ethereum Profit Calculator
Network activity failed to lift up
However, the rise in value didn’t translate into a significant jump in network activity for the proof-of-stake (PoS) blockchain. As per the on-chain analytics firm Glassnode, gas prices remained relatively low and increased just by 28.5% since the ETF announcement.
Source: Glassnode
Gas fee is the amount charged to complete a transaction or execute a contract on the Ethereum network. It is determined by supply, demand, and network capacity at the time of the transaction with lower fees suggesting that the network’s demand was weak.
The transaction count as of 5 June was 740,048, a drop of more than 25% since the BTC ETF announcement.
Source: Glassnode
Staking becomes lucrative
In contrast, the period following the launch of the much-anticipated Shapella Upgrade saw a greater rise in demand. As mentioned earlier, with a similar increase in price, the gas fees shot up by nearly 75% after Shapella.
This was because most Ethereum holders were looking to enjoy staking yields rather than cashing them out in the market. People got more confidence to restake their ETH as the ambiguity surrounding withdrawals was put to rest post Shapella.
As shown below, staking deposits made into Ethereum’s Beacon contract have mushroomed since Shapella went live in April. On the other hand, the total number of transfers to all centralized exchanges has stayed flat.
Source: Glassnode
Read Ethereum’s [ETH] Price Prediction 2023-24
At the time of publication, about 23.8 million ETH were staked on the PoS network, accounting for 17.3% of ETH’s total circulating supply, as per a Nansen dashboard.
ETH exchanged hands at $1,927.36 at press time, representing a marginal drop of 0.39% from the previous day, according to CoinMarketCap data.
