As Ethereum’s price continues to stomp higher, several key network metrics have been signaling investor confidence. These optimistic signs could suggest a volatile but upbeat August for the leading digital currency. A closer look at the Ethereum network provides some insight into the metrics that might be playing a part in the coin’s price recovery.
- I. Ethereum Network-Related Metrics Increase
- II. August Indicators Show Signs of Optimism
- III. Blockchain Confirms Bullish Ethereum Network Activity
- IV. Road Ahead For Ethereum in August
I. Ethereum Network-Related Metrics Increase
Growth in Ethereum’s Node Count Continues
Data from Ether Nodes demonstrates that Ethereum’s node count has been steadily increasing over time. As of October 2020, Ether Nodes estimates that there are over 22,000 individual full nodes in the Ethereum network. This is up 44.5% from data from the beginning of the year. These full nodes are crucial to the security and operation of the Ethereum network. Moreover, the upward trend underscores the growing interest in Ethereum and its blockchain technology.
The growth of the Ethereum network comes as other metrics associated with Ethereum are surging. Ethereum’s daily active users (DAU) recently reached over 700,000; a three-year high. Daily Ethereum transactions are over 1.7 million, a new record. The amount of Ethereum fee revenue surpassed $2.8 million in September.
The increase in these metrics can be attributed largely to DeFi-related products. For instance, the total value locked in DeFi protocols on Ethereum is now over $12 billion, which is up from the $8 billion it was at the beginning of September. Uniswap and Aave are among the protocols driving much of the growth.
II. August Indicators Show Signs of Optimism
The latest indicators from August indicate a strong likelihood of robust economic health.
Manufacturing Activity on the Rise – According to the Institute for Supply Management (ISM), August saw manufacturing activity expand for the fourth consecutive month. The ISM’s index for the manufacturing sector rose to 59.3%, up from July’s mark of 58.1%. This indicates that businesses are increasing production despite the current economic volatility. Additionally, a survey conducted by the National Association of Business Economists found that 47% of economists believe the US is in the early stages of a manufacturing recovery.
GDP Growth Is Steady – The US gross domestic product (GDP) grew at an annual rate of 4.2% in the second quarter of 2019. This was an increase from the previous quarter’s rate of 3.1% and is a sign of a stable economy. Analysts are optimistic that the GDP growth rate will remain steady in the coming months.
Retail Spending Sees Mixed Results – The US Commerce Department reported that sales at retail stores and restaurants increased by 0.4% in August. However, when compared to July, overall retail sales declined by 0.3%. Nevertheless, businesses are pleased with the results as they are up from the same period last year. Other encouraged indicators include:
- A decrease in jobless claims
- An increase in orders for key manufactured goods
- A rise in consumer confidence
Overall, the signs of optimism for the US economy are positive and point to a period of steady growth in the months ahead.
III. Blockchain Confirms Bullish Ethereum Network Activity
Ethereum, the major open-source smart contract and decentralized application (dApp) platform, has seen a number of positive developments this year indicating a bullish trend in its network activity. The following are notable highlights:
- Record-High Gas Used. Transactions on the Ethereum network soared to record levels over the last several months, causing the price of the fundamental transaction fee ‘gas’ to more than double. A higher demand for gas indicates that the network is seeing higher demand from users.
- ETF and Derivatives. Ethereum has recently become the presence of a range of ETFs and derivatives. This allows broader investment by traders and retail users, which primarily drives demand for ETH and its related services.
- Rising Price. This surge in demand for ETH services has been reflected in its price, with the coin rising from a low of $160 in December of 2018 to a current price of more than $300.
These positive developments are also supported by blockchain metrics such as transaction activity and wallet growth, which have been progressively rising since mid-2018. This confirms that Ethereum activity is at a record-high and bullish in nature.
IV. Road Ahead For Ethereum in August
August promises to be another exciting month for Ethereum, with a number of exciting developments in store for its global community of users and supporters.
The Ethereum Virtual Machine (EVM) will officially transition to Ethereum 2.0, the next major upgrade for the network. This provides a more secure and efficient environment for running smart contracts on the platform. Additionally, the launch of the Istanbul hardfork will also bring a number of improvements to the Ethereum network, such as increased gas efficiency and data retention.
Finally, the launch of Ethereum 2.0 will usher in a number of new developers into the space, who will be able to use the platform to develop their own decentralized applications. This will add further vitality to the already thriving ecosystem and build on the momentum that has been gathering since the launch of the original network.
- EVM transition to Ethereum 2.0
- Istanbul hardfork
- Increased incentive for developers
August has been off to a strong start for Ethereum, with network-related metrics lighting up. From increased gas demand to record active wallet counts, it’s become clear that the Ethereum network is continuing to grow and people are maintaining their faith in its security and use case as a blockchain-native digital currency. The future of Ethereum looks bright, and it’s only expected to get brighter as more individuals and institutions embrace the world of cryptocurrency.