Ethereum’s market cap soars past $120bn – but gas fees soar
- The Ethereum price has risen above $1,000 for the first time in three years.
- As a result, its market capitalisation has surpassed $100 billion.
- However, gas prices are also on the rise, crippling the average user.
As Ethereum rises above the four-digit price, transaction fees are following suit. Gas prices climb to the third highest average price.
The world’s second largest digital asset has risen to a Bitcoin Pro three-year high of $1,100. The massive move has added a whopping 35% to the price of Ethereum in just 24 hours.
When you wake up and realise you didn’t buy enough $ETH to pair with your $BTC
– Josh Rager 📈 (@Josh_Rager) January 3, 2021
The big price pump has also pushed Ethereum’s market cap into twelve-figure territory – for the third time ever.
According to Coingecko, ETH market cap peaked at $123 billion today. The last time it was this high was in January 2018 – before the protracted two-year bear market.
ETH up nearly 25%, marketcap tops $100B+ pic.twitter.com/cL4efp1ee0
– Messari (@MessariCrypto) January 3, 2021
The all-time high for Ethereum’s market cap was on 13 January 2018, when it reached $140 billion as prices briefly surpassed $1,400.
Ethereum’s (Go to Ethereum buying guide) market share of the overall crypto ecosystem is 12.5%, according to Coingecko, while Bitcoin dominates a 68% share of the digital asset pie.
Kyle Davis, co-founder of Three Arrows Capital, is bullish on Ethereum:
“I’m warming to $ETH, to be honest … I have a fundamental understanding now. I own it.”
Gas fees rise again
As demand on the network has peaked again, transaction fees have skyrocketed – making smaller ETH transactions completely impractical.
So basically I think at the moment any TX with less than $100 in value is the dust that is not worth it to move. pic.twitter.com/Ly9Op8u5F2
– defiprime (@defiprime) January 3, 2021
As we have already seen, Wale will not be bothered by this, but smaller players will certainly feel the pinch.
Tushar Jain, Managing Partner at Multicoin Capital, explains the network effect:
“Ethereum suffers from the anti-network effect. Every new user makes the system less usable for other users by displacing them. For example, it currently costs ~$100 in gas to trade on Uniswap. Just sending some ETH around costs ~$10.”
According to BitInfoCharts, the average transaction fee has risen to the third highest on record at around $11. And those who want their transactions to go through faster are paying much more.
“ETH Gas Station” reports an average gas price of 220 gwei. As prices continue to march upwards, gas is likely to follow – and a new all-time high could be just around the corner.