- Bitcoin revenue jumped 249% year over year in May, while Ethereum network fees rose 53.7% in May, according to a research report from ETC Group.
- Institutional adoption and ordinal ranking have increased network revenues for Bitcoin and Ethereum respectively.
- Regulation and macroeconomics remain key factors even as the benefits of tokenization attract major banks.
The current market outlook for Bitcoin and cryptocurrencies continues to suffer from the flurry of activity surrounding the US Securities and Exchange Commission (SEC) action after it filed lawsuits against Binance and Coinbase.
While June began with wild volatility that sent prices below key levels, a new report suggests that market headwinds in May did little to slow the network revenue generation of the world’s two largest blockchains by market capitalization over the course of the month.
The growth of the Bitcoin and Ethereum network
The Germany-based ETP (Exchange Traded Products) report highlights a significant jump in network revenue for both Bitcoin and Ethereum over the past month.
Tom Rodgers of the ETC Group Research Team (Head of Research) and Hanut Singh (Research Analyst at ETC Group and officially with CoinJournal) shared the forecast with an overview of the biggest trends and events in cryptocurrency over the course of the month – from regulation to macroeconomics and adoption as well. The data refers to the string.
write in Digital Asset and Metaverse Monthly Review: May 2023Rodgers and Hanot note that despite continued headwinds, the total market capitalization of cryptocurrencies has seen a flat line near $1.1 trillion.
On a macro level, the uncertainty surrounding the US debt ceiling debate has weighed heavily on the cryptocurrency markets. Elsewhere, the regulatory front saw the unfriendly approach by the US Securities and Exchange Commission and the UK Financial Conduct Authority continue to weigh on sentiment.
However, despite these factors, there has been significant growth in terms of network revenue for leading blockchains.
“… sThe number of isopoints generated by the largest blockchain by market capitalization increased dramatically in May due to increased user bases, new technological developments, most notably Bitcoin Ordinals, and increased adoption of Ethereum enterprise solutions.wrote the ETC Group research team.
Ordinals helped Bitcoin’s revenue increase by 249% year-over-year in May
According to a report by ETC Group, weekly revenue on the Bitcoin network increased by 249% year-on-year in May. This was largely driven by the surge in Ordinals, which CoinJournal reports here, has BTC miners posting multi-year highs in transaction revenue.
Demand for Bitcoin Ordinals meant transaction fees amounted to 29.57% of monthly revenue for miners — the last time it was this high was during the 2017 bull market that saw the first real foray into cryptocurrency by institutional investors.
Ethereum network fees jumped 53.7% in May
For Ethereum, renewed interest in staking was evident in May despite concerns of a major withdrawal route following the Shapella upgrade. In fact, as the ETC Group report shows, the supply of stacked ETH on the mainnet increased from 14% to nearly 20% at the end of the month. About $46 billion worth of ETH has been accumulated, representing a 200% jump in the percentage of locked supply on the network.
This happened even as the supply of ETH has decreased since the merge. Meanwhile, monthly fees rose 53.7% in the month — from $241 million in April to $448 million in May. The researchers noted that increased demand for Ethereum block space is behind the jump in total network fees.
Crypto regulation in the United States
While US presidential candidates Ron DeSantis (right) and Robert F. Kennedy Jr. (d) Pointing to support for Bitcoin, the overall view of cryptocurrency regulation in the US remains largely hostile even with bipartisan subscriptions.
The Securities and Exchange Commission recently stepped up its crackdown with lawsuits against Binance and Coinbase, even as the cryptocurrency community is desperately anticipating the outcome of another high-profile case between the SEC and Ripple Labs over the XRP token.
This is even as Asia emerges as a strong destination for cryptocurrencies, led by recent regulatory guidance from Hong Kong that has seen OKX, Huobi and other exchanges apply for licenses. Europe’s adoption of the MiCA rules was also a landmark event that could make the block attractive to more US crypto companies.
Coding sees major banks looking to adopt the blockchain
It may also see a growing institutional interest in blockchain amidst further growth in cryptocurrency.
Interest peaked after State Street, the second-oldest US bank, hinted at a move that is likely to help bring $1.4 trillion in assets to the blockchain via tokenizing ETFs. Bank of New York Mellon has also previously highlighted the issue of tokenization and its benefits.
This is also the view of Citibank, which noted that the tokenization could bring up to $4 trillion of liquid and illiquid assets on-chain.