In the last 24 hours, transaction fees on the Ethereum blockchain surged significantly, aligning with ETH’s price exceeding $3,700, reaching a two-year high. This occurrence coincides with the US Securities and Exchange Commission’s (SEC) postponement in deciding on several pending spot ETH exchange-traded fund (ETF) applications.
Ethereum’s price spike coincides with high network fees
Over the past day, ETH’s price surged by approximately 7% to around $3720 as of press time, reaching its highest level since early 2022.
This surge adds to ETH’s total rally of over 60% in the past month, mirroring the broader crypto market revival that has propelled Bitcoin’s price to more than $67,000.
However, amidst this upward price trajectory, Ethereum network gas prices soared, with an average peak of 79 gwei and peak costs reaching as high as 219 gwei, according to Etherscan data. Many Ethereum users expressed dissatisfaction with the high fees on social media, citing how it affected their trading activities, including token swaps and borrowing transactions.
Notably, this surge in fees led to total network fees surpassing $33 million in a single day, a threefold increase compared to the beginning of the year, according to data from Cryptofees.
Meanwhile, market observers noted that the upcoming Dencun upgrade could address these high fee challenges. This upgrade is expected to tackle Ethereum’s historical issues of slow transaction speeds, limited throughput, and high fees.
SEC postpones decision on spot Ethereum ETF
Despite Ethereum’s remarkable surge, the SEC has extended the delay on its decision regarding BlackRock and Fidelity’s Ethereum ETF application.
The regulator is soliciting public feedback on the potential risks of fraud and manipulation associated with a spot ETH ETF and has also raised inquiries about Ethereum’s proof-of-stake consensus mechanism.
Meanwhile, the SEC’s decision comes as no surprise, with market participants split on whether the regulator would approve Ethereum’s ETF. Industry experts suggest that the SEC maintains a cautious stance on cryptocurrencies, despite its recent approval of a spot Bitcoin ETF.
