Cryptocurrency analytics startup IntoTheBlock reports a significant spike in on-chain activity this week, coinciding with the rally in Bitcoin and other cryptocurrencies to new yearly highs. The surge in on-chain activity led to a substantial increase in transaction fees on the Bitcoin network, surpassing the total fees on Ethereum. Bitcoin fees rose by 60%, while Ethereum fees increased by nearly 50%.
Several factors contribute to the rise in network fees for Bitcoin, including its price surge to yearly highs of $45,000 on December 5, settling above $43,000. Additionally, increased demand for network capacity resulted from a rise in Bitcoin transactions, especially due to the popularity of inscriptions, leading to higher transaction costs.
Bitcoin’s total fees for the week reached $43.8 million, marking a 61.4% increase. Meanwhile, Ethereum’s total fees amounted to $83.3 million, reflecting a growth of 48.3%, according to data from IntoTheBlock.
In today’s trading, Ethereum outperformed Bitcoin in daily gains, reaching new yearly highs of $2,390, a 4.58% increase in the last 24 hours, compared to Bitcoin’s 1.26% increase to $43,937.
Despite Ethereum’s recent bullish climb to new yearly highs, IntoTheBlock notes a concerning trend. The platform observes that Ethereum is not experiencing a significant surge in new users, as the number of new addresses and the adoption rate show no notable spikes. However, Ethereum is unique among major Layer-1 networks in that the percentage of supply held by whales has significantly increased. Whales now hold 35% of the ETH supply, up from 22% in January, according to IntoTheBlock.