Meme Coin Madness Sends Ethereum Fees To 2-Year Highs

Meme coins have ballooned to new prices since the beginning of March, boosting blockchain activity in the process. This recent frenzy has seen Ethereum gas fees surging to two-year highs this week.

IntoTheBlock, a leading on-chain analytics provider, announced this new milestone in a recent post on social media platform X. Data from ITB indicates that Ethereum mainnet’s revenue from network fees reached $193 million this week, pushing the annualized rate to the highest point since early 2022. 

Ethereum’s $190M+ in weekly fees puts it at an annualized rate of over $10B for the first time since early 2022.Due to Ethereum’s fee-burn mechanism, this also has an impact on the supply, decreasing it by 33k ETH (~$125M) this week. pic.twitter.com/iAibEvzh4j

— IntoTheBlock (@intotheblock) March 8, 2024

Ethereum Gas Fee Surges Due To Meme Coin Activity

Recent market dynamics have seen crypto investors flocking to Ethereum-based meme coins like Shiba Inu, Pepe, and Floki. According to ITB data, PEPE has performed the best in the recent meme coin rally, leading with more than a 600% return in February.

PEPE’s gain has been brought forward into the new month, and the crypto is now up by 800% in a 30-day time frame. Floki is also up by 800% in the same time frame.

Shiba Inu is currently up by 275% in the past 30 days, reaching as high as $0.00004456 on March 5. This surge in the price of Shiba Inu was mostly fueled by a 2,000% surge in new addresses from the February average, peaking at 21,000 new addresses on March 5.

Now, Shiba Inu is less than $4 billion behind Dogecoin in market cap and is on the verge of challenging Dogecoin as the biggest meme coin.

The heightened activity on meme coin has benefited a lot of Ether traders, as they have drawn more traders to decentralized exchanges (DEXs) on Ethereum, where trading volumes have seen a 40% increase over the week to $20.74 billion, according to data from DeFiLlama. 

The price of gas fees has also surged in tandem. According to ITB, average gas fees on the blockchain rose to as high as $28 this week. Interestingly, the total money spent on gas fees daily reached $38.02 million on March 5, the highest recorded since May 2023. 

Total crypto market cap is currently at $2.5 trillion. Chart: TradingView

Ether To Keep Benefiting From Meme Coin Activity

The total gas fee spent on the Ethereum network is now at an annualized rate of $10 billion. The last time gas fees reached this high was before the crypto market crash in the middle of 2022.

This heightened activity allowed Ethereum to register a new milestone over the $4,000 price level for the first time in two years.  

Over the past week, Ethereum’s total supply has shrunk due to Ether’s fee-burning scheme, as 33,000 ETH worth over $125 million were taken out of circulation. Ethereum now has a clear path in following Bitcoin’s footsteps and register a new all-time high in the coming weeks. 

Featured image from Pixabay, chart from TradingView