- As Ethereum gas fees surge, it is getting expensive to transact on the Ethereum blockchain.
- Lower value non-fungible tokens may be hit hard with rising Ethereum gas fees that could eliminate the bottom of the NFT market.
- $2 billion worth of Ethereum deposited to exchange wallets may belong to whales looking to take profits.
Ethereum's climb toward its May all-time high of $4,356.99 is interrupted by the ongoing consolidation. Nearly 600,000 Ether was deposited to Binance, triggering concerns of a sell-off.
Ethereum on-chain activity declines in response to rise in gas fees
The popularity of CryptoPunks, a collection of 10,000 faces of humans, aliens, apes and zombies, developed by American studio Larva Labs, set the foundation for the iconic NFT craze of 2021. Recently, payments giant Visa bought a CryptoPunk for $150,000, and the demand for the NFT collection skyrocketed.
NFTs have claimed an increasing share of Ethereum's network activity. Despite the London hard fork, the Ethereum blockchain is not entirely equipped to solve the challenge of scalability, and congestion on the network is driving transaction fees (or gas price) higher.
A cryptocurrency trader and analyst behind the Twitter handle @MoonOverlord commented on the rising gas prices and its impact on the non-fungible token ecosystem.
$ETH gas is rising, if it continues and gets too high it’ll eliminate the bottom of the NFT market because it isn’t feasible to trade. It’ll force people other to chains and platforms like Topshot, Axie, Sorare etc
— BIG DOG (@MoonOverlord) August 24, 2021
