The summer of 2020 was clearly Ethereum’s season this year even though Bitcoin has always been the numero uno crypto coin. The key reason behind the ETH network’s dramatic rise in the early quarter of the year is surely the exponential growth in the DeFi ecosystem. The total value locked in DeFi has crossed a whopping $12 billion this time, inspiring increased attention from investors to DeFi world. As most of the DeFi applications are based on the Ethereum network, the DeFi boom steered staggering popularity for the ETH platform as well.
Ethereum-based DeFi protocols, like exchanges and lending protocols, have shown commendable growth over the 2020 summer. They were offering great bonuses to investors for trading and investing in those portals that further attracted more numbers of investors. Increasing growth in DeFi protocols drove Ethereum’s dominance from 9.8 percent in July to a staggering high of solid 13 percent in the last half of August.
However, with the DeFi boom cooling down of late, Ethereum’s dominance has reduced to 11.65 percent as of November 2020. One of the major effects of slowing down the DeFi boom is seen in the dramatic fall in Ethereum fees. If we look back, total fees on Ethereum rose to a staggering 166 million USD in the third quarter of the year from 22 million USD. It was mainly leveraged by the launch of Compound’s governance token COMP in June. In fact, ever-increasing DeFi transactions in September led to a massive hike in ETH miner fees which turned out to be 6x more compared to that of BTC miners.
But, cut to October 2020, volume of transaction fees on Ethereum have plummeted to 57.49 million USD compared to an immense 166.39 million USD just last month in September.
“October saw a massive decrease in trading volumes on decentralized exchanges, up to around 25 percent and that’s not a small number. Drop in trading volumes eventually led to drop in transaction costs on Ethereum as well”, noted Sina Estavi, CEO of rising oracle system Bridge Oracle.
On the other hand, Bitcoin is showing a consistent bullish run over the past 6 months as well. As November commenced, Bitcoin left the whole crypto community in awe by shooting to a huge $15,000+ mark. This massive growth brought an immediate effect on BTC transaction fees which rose to $13, the highest level for the coin since 2018 January. On the other hand, ETH fees have reduced to a shocking $0.89 in November from $14.5 in September!
A major reason behind Bitcoin’s staggering growth of late is surely the depreciating value of the US dollar. With the dollar losing down on its value, investors are looking for hedge alternatives and crypto coins like Bitcoin seem to draw the fair share of limelight today. Besides, the increasing adoption of Bitcoin by corporate giants is another key factor behind BTC’s solid growth in the final quarter of 2020.
It can be safely said if Ethereum had the summer this year, Bitcoin has claimed the autumn.
Get the latest Crypto & Blockchain News in your inbox.