Ether‘s ongoing bull run appears to be backed by fundamentals, with active user participation in Ethereum’s network booming alongside the cryptocurrency’s price.
The number of unique active ether addresses, either as sender or receiver, rose to a new record high of 7.94 million on Sunday, topping the previous peak of 7.14 million reached on Jan. 16, 2018, according to data provider Glassnode.
The tally has increased by more than 100,000 in the past three days alone, taking the year-to-date growth to 86%.
“Ethereum network fundamentals that include … transactions, active address, fee collection, and many other metrics are making ether fundamentally strong,” Shivam Thakral, CEO of India-based crypto exchange BuyUcoin, said.
Active Ethereum addresses and daily transaction count bottomed out in early 2020 and have been rising ever since, signaling the potential for a bull run in ether. “When there’s greater usage of a cryptocurrency there’s more demand, and that drives the price up,” Chainalysis’ economist Philip Gradwell told CoinDesk last year.
Ether, the native token of Ethereum, has responded positively to the network growth, rising by a staggering 2,355% since early 2020. The cryptocurrency is trading at record highs above $4,100 at press time – up 450% so far this year. Prices have doubled in the past two weeks alone, per CoinDesk 20 data.
Bitcoin, the biggest cryptocurrency by market value, is trading near $58,200, representing a 100% year-to-date gain.
Since the first quarter of this year, the network has been facing congestion and charging relatively higher transaction fees than rivals like the Binance Smart Chain.
So far, however, high fees have largely failed to deter users, as evidenced by the continued rise in the active addresses and transaction count (now also at record highs). That’s a sign of real fundamental growth, according to some analysts.
“Low-fee chains can fake activity much more easily than chains like Ethereum and Bitcoin,” said Alex Svanevik, CEO of blockchain data company Nansen. “So when active addresses on Ethereum are at record highs, that’s a true sign of organic growth.”
Arash Ghaemi, director of the strategy at Two Prime Digital Assets, foresees a further increase in active user participation, as web search data shows popular interest in Ethereum is rising.
“Ethereum searches are going parabolic while Bitcoin searches drop/level off,” Ghaemi said in a Twitter thread on Monday. “As Google search interest rises, so will active ETH addresses, putting pressure on price upwards.”
Also read: Ether Price Pushes Past $4K for First Time, Approaches JPMorgan’s Market Value