- As market players shift down the risk curve and reallocate money from CEXs to onchain operations, capital rotation is probably the cause of this surge.
Ethereum recorded its highest monthly volume of the year in November, with a onchain volume of $183.74 billion. This is the largest Ethereum onchain volume in almost three years, since $241 billion in December 2021.
Although this amount is still far below its peak of $404.93 billion in May 2021, November’s results show a return to healthy activity levels. It is a robust 9% growth above previous yearly highs set in March and nearly triple the year’s lowest onchain volume of $107.93 billion in January.
As market participants shift down the risk curve and reallocate funds from centralized exchanges (CEXs) to onchain activity, capital rotation is probably the primary cause of this increase.
The shift into NFTs, which has led to a minor rebound in the NFT industry, is one noteworthy example of this capital rotation. The cumulative monthly volume of Ethereum-based NFT marketplaces reached its highest level since June in November.
Over the last three weeks, the average weekly volume of NFT trades on Ethereum has been $55 million, which is almost twice as much as the weekly average over the preceding months.
The rise in the floor pricing of a number of well-known NFT projects this month, such as CryptoPunks, Pudgy Penguins, and Milady Maker, lends even more credence to this. In November, the floor expenses for these projects went up by 36.7%, 46.5%, and 55%, respectively.
Curiously, despite record yearly onchain volumes, the 7DMA of the average transaction fee on Ethereum has remained comparatively low, at only 1/5th of the price observed during the last yearly highs in March.
This disparity most likely results from the altered makeup of Ethereum’s onchain transactions. Compared to March’s high-fee speculative activities, such token launches and trades, November’s activity likely included more stable and high-value transactions, which typically utilize less gas.
It’s also possible that Solana has become the new home of high-volume, high-velocity, high-speculation onchain trading, with sites like pump.fun driving the trend.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
