- Ethereum’s network fees have spiked.
- The development follows a recent ETH price rally inspired by BlackRock’s recent ETF filing.
- The community remains excited at the prospect of institutional inflows.
The Ethereum (ETH) ecosystem has been awash with excitement since BlackRock submitted its filing to launch a spot Ethereum ETF product. But this excitement that has sent ETH’s price rallying to multi-month highs above $2k may pose an unintended cost to everyday network users.
Gas Fees Tap Four-Month High
As is typically the case during high periods of excitement on the Ethereum network, gas fees are rising. On Tuesday, November 14, blockchain analytics firm Santiment Feed disclosed that fees on the Ethereum network had risen to their highest point since July 4, 2023, at around an average of $5.72 per transaction.
Market forces determine fees on the Ethereum network. The higher the demand for Ethereum blockspace, the higher the fees users pay for transactions. The latest spike in gas fees comes as the BlackRock ETF filing has sparked renewed interest in the Ethereum network.
Many members of the crypto community believe that ETFs have the potential to bring trillions of dollars into the crypto market and could drive the prices of assets higher by providing a familiar on-ramp for institutional and traditional investors.
As such, the recent filing from BlackRock, the world’s largest asset manager and one of the most influential companies in the world, has sparked significant optimism about a significantly increased capital flow into the Ethereum network.
BlackRock pitched its proposed Ethereum ETF as a safer means for investors to gain exposure to the popular crypto asset in its filing dated Thursday, November 9.
"Approval of a spot ETH ETP would represent a major win for the protection of U.S. investors in the cryptoasset space," the firm asserted.
On the Flipside
- Higher gas fees lead to more significant Ethereum token burns, which leads to greater token scarcity that could boost the overall volume of the asset for holders in times of high demand.
- BlackRock has also filed to launch a spot Bitcoin ETF.
- Layer 2 solutions exist to tackle Ethereum’s scaling concerns.
Why This Matters
The spike in Ethereum gas fees makes it more expensive for everyday users to interact with the network.
Read this to learn more about the happenings following the recent Ethereum rally:
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