According to recent reports, Ethereum gas prices have dropped to below $3, breaking the lowest record in 10 months. The Ethereum Ropsten Merge testnet launching on June 2, 2022, which will eventually add to the mainnet on June 8, 2022, is highly likely to boost the low gas prices and demand for Ethereum.
For the past few weeks, Ethereum gas prices have been dropping day by day, and now reached record-breaking low opening doors for small and new investors to trade or mint Ethereum-based NFTs on the marketplaces.
For many years, NFT and the crypto community have complained about the high gas prices on the Ethereum blockchain that was sometimes higher than the NFTs themselves. Ironically, now Ethereum gas price is lower than $3 just before the testnet launch.
Ethereum gas prices dip since July 2021
Similar to the crypto crash in July 2021, this year’s crypto crash drove Ethereum prices to the lowest of lows. For the past few weeks, the prices have been lowering slowly until on Sunday, May 30, 2022, the gas price went to the lowest point of $2.96 per transaction.
Based on the data collected, this year’s Eth gas price median-sized dropped to the lowest. The prices began declining in mid-February during the Russia-Ukraine war and continued to drop until now. Compared to March 2022 when the price was $3.73 per transfer, now it is below 0.00086 ETH around $1.56 per transaction on May 29. As May closed with low gas prices, it is a golden opportunity for traders to buy their favorite NFTs without worrying about the prices.
Small investors always found it difficult to afford expensive transaction fees and often complained about it. Although Ethereum announced that its soon-to-be-launched update, known as Eth 2.0, will eventually offer cheap transaction costs, the dip for May is also a good price to buy Ethereum NFTs.
What’s the reason behind ETH’s low gas price?
At the start of the year, Ethereum gas prices were peaking high, but ever since the crypto crash, the prices have lowered each day until they hit rock bottom on May 30.
According to Santiment, a crypto analyst firm, Ethereum’s low gas price indicates less activity in the network which means there is an overall decline in interest in the Ethereum blockchain. The circulation supply is lower than ever, and the charts show “hybernation” for Ethereum.
Why are gas prices so important?
Ethereum’s low gas fee is good news for small investors but it might be bad news for the network itself. A gas fee is the transaction cost miners pay for minting a token or NFT as a validation. When the activity on a network is high, the gas fee also surges. If there is no activity, the gas price lowers, which is occurring at the moment.
On Sunday, Ethereum Layer 2 transaction fee to transfer Ethereum was also quite low. Zksync protocol is offering transactions around $0.04 to transfer ETH and $0.09 for swapping a coin. The transaction fee is the same for Loopring and $0.45 to swap coins. For Arbitrum One and Optimism, the transaction cost is $0.12 and $0.23 per transfer respectively.
For anyone looking for an opportunity to swap tokens or mint NFTs, this might be the right time to do it.
Ethereum’s “The Merge”
Ethereum Ropsten Merge testnet is scheduled to be launched on June 2, 2022. The execution layer will transition from Proof-of-Work to Proof-of-Stake at the specified Terminal Total Difficulty (TTD). According to the developers, this essential testnet upgrade will complete on June 8, 2022, and added to the mainnet soon. As a result, the Ethereum prices are expected to surge as the supply will be cut by 90% which will increase the altcoins’ demand in the market.
ETH coin price
Since the Ethereum gas fee is affected by the ETH coin on the crypto market. For the past week, ETH experienced a bullish divergence, this week, a major investor transferred a huge amount of ETH coins to their exchange wallet, causing fear of a massive sell-off.
Today, ETH sits at $1,941 against USD.
To conclude, right now, the gas fee is low due to the crypto crash and low trading. Once the Merge is nearly launched, Eth coin prices will reach as high as $10,000 due to an increase in demand and the gas fee will be low compared to previous ones due to the POS upgrade in the Ethereum mainnet.
