The Ethereum network reported solid revenue of $365 million in the first quarter of 2024, an impressive 155% year-on-year increase in revenue.
According to a report by Michael Nadeau, an analyst at The DeFi Report, Ethereum’s first-quarter revenue represents a staggering 200% increase over the $123 million profit reported in the fourth quarter of 2023.
The main factor contributing to the significant increase was a surge in decentralized finance (DeFi) activity during the quarter, driving greater network participation.
Ethereum fee revenue reached $1.17 billion in the first quarter
Ethereum fee revenue generated from user transactions reached a significant milestone of $1.17 billion in the first quarter, a remarkable 155% increase over the same period in 2023 and an 80% increase over the previous quarter.
Increased network activity, fueled by the growth of DeFi applications, caused Ethereum’s average daily transactions in 2024 to exceed last year’s figures. The current average of 1.15 million transactions per day is close to the peak levels recorded during Ethereum’s momentous growth in 2021.
It is worth noting that Ethereum, which was launched in 2015, reached its first profitable year in 2023, amassing $623 million in revenue.
Cryptocurrencies versus other assets
Nadeau said that “crypto will perform better than anything else” in the coming years. He predicts favorable liquidity conditions for the coming years, related to the need to refinance a significant portion of US debt and the market’s expectation of three interest rate cuts by the Federal Reserve.
These factors could provide tailwinds for risky assets such as technology stocks and high-quality cryptocurrencies. Nadeau identified three additional catalysts that point to an upward configuration of the cryptocurrency market.
First, the introduction of U.S. Bitcoin Exchange Traded Funds (ETFs) is expected to increase the interest in and availability of cryptocurrencies.
Second, Bitcoin‘s upcoming halving, scheduled for April 20, has historically caused an increase in the following year.
Finally, Nadeau highlighted the ongoing innovation cycle, which he believes will attract new venture capital funds and reignite retailers’ interest in cryptocurrencies as the industry matures.
Although Bitcoin typically performs better in the early stages of a bull market due to its widespread recognition, Nadeau noted that Ethereum and altcoins tend to outperform Bitcoin in the later stages of the cycle.
Altcoins, which have a clear product-market fit, have shown significant growth in previous cycles, outperforming Bitcoin throughout. Meanwhile, the Ethereum network has surpassed one million validators with some 32 million Ether bets worth some $114 billion.
Data from the Dune Analytics dashboard, which tracks Ethereum’s betting progress, shows that the number of validators reached one million on March 28. The 32 million Ether bets represent about 26% of the total supply, underscoring the significant commitment to Ethereum’s proof-of-stake (PoS) consensus mechanism .
