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The recent surge in Ethereum’s onchain volume signifies a remarkable rebound in cryptocurrency activities, reaching an impressive $183.74 billion in November.
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This monthly figure not only marks the highest for 2023 but also indicates a notable shift from centralized exchanges to onchain transactions.
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According to COINOTAG’s Data & Insights newsletter, the uptick in trading activity has been driven by a notable capital rotation towards more stable investments, including NFTs.
Ethereum’s onchain volume surged to $183.74 billion in November, the highest this year, indicating a shift to onchain transactions and NFT activity, as per COINOTAG.
Ethereum’s Remarkable Volume Surge Signals Market Recovery
The Ethereum network has witnessed an extraordinary rise in onchain activity, with November’s $183.74 billion volume showcasing a revitalized interest in decentralized finance (DeFi) and related applications. This represents a solid 9% increase compared to the highest yearly volumes recorded earlier in the year. Although it still falls short of its peak of $404.93 billion in May 2021, the growth indicates a significant recovery after a challenging market period. Investors are re-engaging, particularly as onchain activities become more favorable compared to centralized exchanges (CEXs) amidst a more cautious risk appetite.
Resurgence of the NFT Market Boosting Ethereum Activity
As part of this upward trend, the NFT sector has also seen a distinct resurgence. NFT marketplaces based on Ethereum have reported their highest combined monthly trading volumes since June. Recent reports highlight an average NFT trade volume of approximately $55 million per week over the last three weeks—nearly double the preceding average. This uptick has been complemented by significant increases in floor prices for prominent NFT projects such as CryptoPunks, Pudgy Penguins, and Milady Maker, which have reported gains of 55%, 46.5%, and 36.7% respectively this month, further locking in Ethereum’s role as a critical player in the NFT space.
Transaction Fee Dynamics and Composition Changes
Interestingly, despite Ethereum’s record yearly onchain volumes, the seven-day moving average (7DMA) of transaction fees remains notably low, merely 20% of the rates seen during earlier peaks in March. This discrepancy can be attributed to the transformation in the nature of onchain transactions; recent activities have skewed towards larger, more stable transfers instead of high-fee speculative trades, signifying a maturation of investor behavior in the market.
Shift in Transaction Locations: The Case of Solana
Moreover, there is emerging evidence that hyper-active trading may be transitioning to other blockchain platforms, notably Solana, where innovative frontrunners like pump.fun are gaining traction. This migration could represent a diversification of trading activities as users explore alternative platforms for their speculative needs without sacrificing the efficiency and cost-effectiveness of onchain transactions.
Conclusion
In summary, the recent surge in Ethereum’s onchain volume highlights not only a recovery in trading activity but also a strategic shift among investors towards onchain assets, primarily driven by the NFT market’s resurgence. As transaction dynamics evolve and costs stabilize, Ethereum remains positioned as a critical component of the broader cryptocurrency landscape, while also reflecting shifting trends in investor strategies. The ongoing developments suggest a cautiously optimistic future, though the focus will remain on how external factors may influence this renewed momentum.
