Key Points
- New Ethereum wallet addresses have hit a record low in 2024, signalling a drop in interest in the digital asset.
- Despite this, rival networks like Solana and Bitcoin have seen an uptick in new addresses.
The interest in Ethereum has seen a significant drop this year, even in the face of the approval of spot Ether exchange-traded funds (ETFs).
Data shows that the creation of new Ethereum wallet addresses has reached its lowest point in 2024, suggesting a decline in interest in the digital asset.
Currently, the seven-day moving average of new Ethereum wallets stands at 82.15K, the lowest level since December 2023.
The Ethereum Network’s challenges are further emphasized by the decrease in active addresses in August.
Other Networks See Increase
Data from bitinfocharts shows that the number of active Ethereum addresses has dropped to 564.8k, a decrease from 931.8k in June.
This fall has nearly pushed the number of active Ethereum addresses to a six-month low.
On the other hand, Ethereum’s competitor, Solana, often referred to as the “Ethereum Killer”, has witnessed a rise in new addresses.
Its decentralized exchange (DEX) ecosystem is quickly catching up with Ethereum, aided by the continued popularity of meme coins.
The Bitcoin network has also seen a rise in new addresses, despite the current market volatility.
However, this increase hasn’t boosted the on-chain engagement, suggesting that these new wallets aren’t improving the overall network utility.
Reasons for the Decline
The recent launch of spot Ether ETFs in the United States could be one reason for the decline in Ethereum addresses.
It seems some investors are now moving to these funds instead of purchasing the cryptocurrency directly.
Moreover, the March 2024 Dencun upgrade, which reduced the total supply of Ethereum, did not lead to the anticipated price increase.
This may have further dampened investor interest.
Ethereum’s value has been under substantial pressure.
Currently trading around $2,240, ETH has fallen by over 23% in the past 24 hours alone, startling investors and traders alike.
Over the past week, Ethereum has lost more than 33% of its value.
The cryptocurrency’s market cap has also experienced a steep decline, now standing at $268.8 billion.
Ethereum is now down by 55% from its all-time high of $4,891 achieved in November 2021.
This consistent drop in demand is also mirrored in the inflows to spot Ether ETFs.
These products have seen a cumulative outflow of $510 million since their launch.
On Friday, they faced a combined outflow of $54.27 million.
Despite this short-term decrease in demand, experts suggest that these ETFs will eventually lead to positive growth.
Analysts predict that Ether could see its price surge to $6,500 later this year.
Meanwhile, the broader cryptocurrency market is also experiencing price volatility.
Bitcoin is currently trading at the $52,000 level, down by over 13% in the past 24 hours.
