Here’s the big picture behind Ethereum’s rate of 1.53M new addresses

Ethereum’s price climbed back above $3,000 on Tuesday after a weekend slump. This came after a prolonged period of trading under that level.

2021, in fact, was a fortuitous year for the world’s second-largest cryptocurrency, with ETH seeing a fourfold increase in value in 12 months.

Continue the trend in 2022

ETH broke past the $3,120-resistance and traded ar a new high of $3,196, at press time. It has also enjoyed immense traction or rather adoption from different institutions across the globe. Following the number of addresses with a balance

Blockchain analytics firm IntoTheBlock shared its findings on the altcoin recently. Ethereum’s network gained 18.36 million addresses with a balance greater than zero in 2021. This marked a growth rate of 1.53 million new addresses per month.

Source: IntoTheBlock

While the number of addresses with a balance does not provide an exact number of holders (As many users can have more than 1 address), it does act as a proxy to the network growth.

Fierce competition

Now, the aforementioned metric projects an extremely bullish case for Ethereum. However, ETH’s price isn’t directly proportional to this growth.

The number of Addresses holding 1k+ Coins has declined since the start of 2021. In fact, on-chain analytics firm Glassnode reported on 13 February that whale wallets had hit a 4-year low of 6,226.

Even so, the average daily amount of transactions on Ethereum has remained constant, without any upside trajectory. At press time, it stood at around 1.2 million. The same has more or less held this level since the middle of December.

Source: Ycharts

The unprecedented hike in gas fees may be one of the reasons behind this stagnant approach. Many users may be looking for other alternatives that serve the same purpose as Ethereum’s.

Polygon, a Layer 2 solution built on top of Ethereum, gained significantly from this deficit. It allowed projects to pull the actual meat of their transactions off its blockchain while still uploading the transaction details to the Ethereum blockchain.

It averages more than double the daily transaction volume of Ethereum. At the time of writing, it incorporated more than 3 million transactions per day. Also, On 29 January, this year, it had over 7,000 decentralized applications.