Blockchain analytics firm Glassnode says activity on the Ethereum network is surging as the second-largest crypto asset by market cap hits new all-time highs above $3,500.
In its weekly report, Glassnode says investors are clearly moving large amounts of ETH from centralized exchanges to their own private wallets.
The report says that exchanges now hold only 12% of the total ETH supply, while smart contracts hold 22.8%, indicating soaring interest in the decentralized finance (DeFi) space.
Glassnode says Ethereum is also seeing higher throughput since Ethereum miners adjusted the block gas limit to 15M, leading to a drop in gas prices and therefore an increase in transaction volumes.
“The overall throughput of the Ethereum chain has reached a new all-time-high this week of 16.5 transactions per second. The prior all-time-high of 13.5 TPS was set at the peak of the 2017 bull run which has since been eclipsed for the majority of 2021.”
The report adds that the spike in activities is lowering the Ethereum NVT Ratio (Network Value to Transactions Ratio), a measure of the network’s market cap against the volume of US dollar transmitted on-chain.
A downward trend is typically viewed as a bullish indicator for the network.
“The chart below demonstrates an Ethereum NVT trending strongly downwards since Jan 2020, especially since the sell-off in March 2020. Recent high transaction throughput has also driven the NVT Ratio lower over the past few weeks, suggesting support for the recent constructive price action.”