In the first quarter of 2024, the Ethereum network saw a significant revenue increase, totaling $365 million, marking a 155% growth compared to the previous year.
Michael Nadeau, an analyst from The DeFi Report, noted that Ethereum’s income for Q1 reflects a remarkable 200% rise from the $123 million profit reported in the fourth quarter of 2023.
This considerable growth was largely fueled by a boost in decentralized finance (DeFi) activities, which led to increased participation across the network.
Ethereum Fee Revenue Reaches $1.17B in Q1
In the first quarter of 2024, Ethereum’s fee revenue from user transactions hit a significant $1.17 billion, representing a 155% year-over-year increase and an 80% rise from the previous quarter.
This increase in network activity, driven by the popularity of DeFi applications, has led to Ethereum’s average daily transactions in 2024 exceeding last year’s numbers.
Currently, the network averages 1.15 million transactions daily, approaching the peak levels seen during Ethereum’s significant run in 2021.
Notably, Ethereum, which started in 2015, recorded its first profitable year in 2023 with total revenue of $623 million. Although this figure is 75% lower than the $9.9 billion peak in 2021, the milestone was largely due to the switch to a proof-of-stake consensus in September 2022. This change significantly reduced the token incentives paid to miners, now referred to as validators.
Cryptocurrencies to Outperform Other Assets
Nadeau stated that cryptocurrency is expected to surpass all other investment types in performance over the next few years.
He predicts that the environment will remain liquid for several years, fueled by the necessity to refinance a significant volume of debt in the United States, along with market expectations of three interest rate reductions by the Federal Reserve.
These conditions are likely to boost risk assets, including technology stocks and reputable cryptocurrencies.
Nadeau also highlighted three key factors that suggest a positive trend for the cryptocurrency market.
First, the launch of U.S. spot Bitcoin exchange-traded funds (ETFs) is anticipated to enhance both interest in and accessibility to cryptocurrencies.
Second, the upcoming Bitcoin halving event on April 20 is typically followed by a market upswing in the year after.
Finally, Nadeau pointed out the continuous cycle of innovation in the cryptocurrency sector, which he believes will attract new venture capital and rekindle interest among retail investors as the industry evolves.
While Bitcoin usually leads in performance during the initial stages of a bull market due to its well-established reputation, Nadeau observed that Ethereum and other alternative cryptocurrencies (altcoins) tend to surpass Bitcoin’s performance in the latter parts of the cycle.
Altcoins with a clear product-market fit have shown significant growth in past cycles, outpacing Bitcoin over the entire period.
Additionally, the Ethereum network has achieved a milestone with over one million validators, with roughly 32 million Ether, valued at about $114 billion, staked in the network.
According to data from the Dune Analytics dashboard, which monitors Ethereum’s staking activity, the count of validators reached one million on March 28.
The 32 million ETH staked accounts for about 26% of Ethereum’s total supply, underscoring the strong commitment to its proof-of-stake (PoS) consensus mechanism.
