Ethereum raises more than Bitcoin, Dogecoin, Binance, Cardano and Solana combined – BTC Direct

Last week, more than 450 million euros worth of Ethereum was withdrawn from exchanges. Probably because investor sentiment is positive and they expect higher prices. In the meantime, they keep the coins under their own management or speculate with them in other ways.

Ethereum is becoming scarcer on exchanges

Crypto platform IntoTheBlock, for example, tweeted last week that 180,000 ether was taken off exchanges on Tuesday alone. Not so much ether has been withdrawn from the exchanges since October. At the time, this was followed by a 15% price increase.

Largest Outflows in 2022 – over 180k $ETH was withdrawn from centralized exchanges within a single day

-Last time such a magnitude of ETH left exchanges was in Oct 2021, preceding a 15% price increase within ten days
-190k ETH was also deposited into Lido’s stETH liquid staking pic.twitter.com/wayu2nvRlR

— IntoTheBlock (@intotheblock) March 18, 2022

Also this week the ethereum pricealbeit not very spectacular. On March 15, the price was about 2,300 euros, at the time of writing ethereum is 2,650 euros.

Not wanting to sell Ethereum

Blockchain Research Company chainalysis confirms the conclusion of IntoTheBlock. The chart below shows an estimate of the changing Ethereum balance of exchanges over the past 30 days. On Friday, between 36,334 and 179,771 ethers left exchange wallets. That is a very bullish signal from (and for) investors.

On March 15, when the price was lowest this week, most of the coins were withdrawn from exchanges. This was followed by a rising price. Chainalysis writes about this outflow:

“Assets held on exchanges increase when more market participants want to sell than buy, and when buyers choose to store their assets on exchanges.”

Multiple important factors

If you are now thinking of including the outflow/inflow of certain coins on exchanges in your investment strategy, then you would do well. But make sure this isn’t all you’re looking at. There are often several reasons for an increase or decrease. Take last week as an example.

Almost all cryptocurrency prices have risen last week. That’s partly because bitcoin had a green week, and that could be because the US central bank decided to hike rates by 25 basis points (it’s still amazing how a geek’s toy has evolved into something that affects macroeconomic decisions). .

Transaction costs 30x higher than bitcoin

Another way (though not completely foolproof) to determine whether a crypto is in demand is to look at transaction costs and the number of transactions processed. According to the overview below of CryptoFees.info Ethereum is much more widely used than Bitcoin.

CryptoFees reveals that the Ethereum network generated $9.6 million in daily transaction fees on Friday, while Bitcoin had $323 thousand in transaction fees. There is no blockchain network in the world that collects as many fees as Ethereum.

The glass-half-empty approach is that there is no blockchain network where users have to pay as much to use as on Ethereum. However you want to look at this, the fact remains that users are willing to pay the transaction costs to use Ethereum.

We just made a comparison with Bitcoin, but it is better to compare with networks that try to offer the same as Ethereum. Then you end up with Binance Smart Chain, Avalanche, Solana, and Cardano. Ethereum has raised more transaction fees than all these blockchains combined.

Why is Ethereum in so much demand?

Bitcoin may be the best-known crypto, but it is mainly used for simple transactions that do not require smart contracts. This ensures that bitcoin is reliable, safe and stable. But it is of course not so sexy for investors who want to take a little more risk.

For example, Ethereum hosts many decentralized applications in defi and other projects, including blockchain-based metaverses and NFTs.

In addition, Ethereum’s second tiers process nearly $150,000 in fees per day, or about half of bitcoin. For example, in the table above you see Polygon with $43 thousand in transaction costs. Polygon (formerly Matic) is an important second layer of Ethereum.

Miners and strikers

Despite Ethereum being by far the largest network when it comes to collecting fees, a transaction currently costs on average a little over $1†

This indicates that a lot of transactions are made on Ethereum. Yesterday, $ 9.6 million in transaction costs was paid, so calculate if you have to pay slightly more than 1 dollar per transaction.

This is enough to give Ethereum miners, and soon strikers, a big smile.