According to data from crypto metrics site BitInfoCharts, the average transaction fee on Ethereum is now $51.45. Since late June, the figures have increased by 2,293 percent.
Only seven days ago, the average Ethereum transaction fee was $22.52. This month has been especially volatile for Ethereum gas fees. The average fee on October 15 was $45.74, nearly double the figure on the first of the month: $23.79.
The price of transactions on Ethereum has been swinging since the London hard fork in August, but despite wild fluctuations—often between days—the network’s gas fees are trending upwards.
It’s worth noting that BitInfoCharts provides a figure based on yesterday’s average transaction fees. At the time of writing, the real-time transaction fee on Etherscan averaged $44.33.
Why are fees increasing?
When the demand for Ethereum rises, so do transaction fees. Last week, the prices of Ethereum and Bitcoin rose in lockstep, with both reaching new all-time highs in the middle of the week.
Since then, Bitcoin’s price has fallen from $66,930 to $61,683, a drop of about 8%, while Ethereum has continued to rise, reaching a new all-time high of $4,456 yesterday.
The price movements of the two market leaders are frequently similar. The global cryptocurrency market has a combined market capitalization of $2.63 trillion. Bitcoin commands $1.1 trillion of that, with Ethereum commanding a respectable half-trillion dollars.
The doubling of Ethereum’s average transaction fee from last Saturday to today roughly corresponds with trading volumes over the last seven days. Last Saturday, $14.7 billion in Ethereum was traded, with the figure rising to $26 billion yesterday.
The excitement surrounding the blockchain’s latest network upgrade may have contributed to Ethereum’s explosive price performance and trading activity in the last week. The Altair upgrade is a step toward Ethereum 2.0, which will be a faster, greener, less expensive, and more secure Ethereum network.
Altair is specifically designed to help Ethereum transition from a network that uses a proof-of-work consensus mechanism—where miners with the most computing power validate the most transactions—to a network that uses proof-of-stake, where miners who stake the most ETH validate the most transactions.
Clearly, the network has a long way to go before it can deliver on its promises of lower gas prices. Nonetheless, today’s price movements are a strong indication that many are jumping on board.