Ethereum’s Trading Volume and Transactions Decline in August

Trading volume and daily network transactions on Ethereum (ETH +2.46%) have decreased throughout August.

The Block’s Data Dashboard reveals that the seven-day moving average of daily trading volume on the Ethereum network has dropped by around 55% over the past month. The seven-day average of daily economic throughput on the Ethereum blockchain in U.S. dollar terms fell from $6.56 billion on July 26 to $2.9 billion today. In July, Ethereum’s monthly trading volume was $134.71 billion, whereas August’s trading volume currently stands at $91.46 billion, with five days left in the month.

Another indicator of economic activity also shows decline: the seven-day moving average of daily transactions on the Ethereum network has hit a multi-month low. On Sunday, around 1.07 million transactions occurred on Ethereum, marking a decline from the peak of 1.32 million daily transactions recorded on March 25 this year.

Additionally, The Block’s data indicates that monthly transactions on Ethereum are at a multi-month low for August. So far this month, 27.27 million transactions have taken place, a level not seen since May 2020, compared to 35.49 million transactions in July.

Coinbase analysts view the drop in trading volume and overall activity on Ethereum as part of a cyclical pattern, consistent with historical summer lulls. Analysts David Duong and David Han note that this August’s decline in blockchain activity is less pronounced than in prior years: “The decrease in ether trading volumes in August compared to the preceding three months has been a modest 7.7%, compared to the average 16.8% decline observed over the last five years,” they explained.

Reduced Institutional Interest in Ethereum

One analyst pointed to the underperformance of spot Ethereum exchange-traded funds compared to their Bitcoin counterparts as a sign of reduced interest from institutional traders.

According to BRN analyst Valentin Fournier, there has been a seven-day positive streak for Bitcoin ETFs, while Ethereum has lagged, even amid decreasing outflows from Grayscale. “This shows Ethereum is lacking interest from institutions and can partly be explained by the opportunity cost of the absence of restaking. We recommend shifting a higher allocation toward Bitcoin as we expect Ethereum to continue lagging,” Fournier stated.

As of 9:14 a.m. ET, the price of ether decreased by 0.6% to $2,734, according to The Block’s Price Page.