Ethereum is being dogged by high gas fees – here’s how it’s affecting price

Posted: 10 September 2021 2:49 am
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Despite the recent uncertainty surrounding Ethereum (ETH), the altcoin has continued to record fortnightly gains of over 11%.

  • August alone saw the non-fungible token (NFT) market record transaction volumes of $1 billion.
  • Most popular NFT projects, including CryptoPunks, Art Blocks and BAYC, have witnessed massive dips in their weekly trade volumes.
  • The cost of facilitating a transaction on the Ethereum network rose as high as $36 this week.

A little over a week ago, it appeared as though Ethereum, the second-largest cryptocurrency by total market capitalization, was on its way to smashing its all-time high value of about $4,300 that it had scaled up to earlier this year. However, over the last 7-day span, the altcoin has gone on to register an average loss of around 8%. At press time, ETH is currently trading at $3,318.

As a result of this volatility, a massive decline in NFT sales – especially those related to digital collectible projects – was witnessed across the board. That said, to put things into perspective, total non-fungible token sales globally were found to have exceeded the $1 billion mark during August alone.

Amidst last week’s price turbulence, the Ethereum network – which currently houses a bulk of the NFT market – faced a lot of transactional congestion. Over the last 24 hours, the network’s average fee rose as high as $36, making the ecosystem practically unusable for most small-time retailers.

How to buy Ethereum

A closer look at the numbers

As per data made available by OpenSea, NFT sales on secondary markets have continued to subside through the first 10 days of September, with a number of highly touted projects including CryptoPunks, Art Blocks and BAYC witnessing massive 7-day trade dips of 85%, 82% and 69% respectively.

In fact, just one project in the top 20 has been able to record an increase in its 7-day trade volume: Vine co-founder Dom Hofmann’s Loot (for Adventures) NFT, which saw its trade numbers go up by a cool +8%.

Sotheby’s recent NFT auction fetches a cool $24 million

Expected to fetch anywhere between $12-$18 million, the auction of Yuga Labs’ 101 Bored Ape Yacht Club (BAYC) collection has gone on to smash all its previous price projects by bagging a final bid of $24.39 million. To be a bit more elaborate regarding the specifics of the deal, the above-stated NFT bundle consists of 101 Bored Apes and three M1 and three M2 “Mutant serum” NFTs.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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