Ethereum gas fees drops to historic lows as institutional demand for ETH stutters

On the Ethereum network, a major smart contract platform, transaction fees have reached near-historic lows of just 0.16 gwei, or approximately $0.01 per transaction. This, however, signals a more mature and scalable infrastructure, ready for advanced real-world use cases.

More than 1 million transactions take place on the Ethereum network on a daily basis. This week, daily transitions rose to 1.6 million. But even with all the upgrades to the network, these transactions aren’t free. Gas fees must still be paid in Ethereum’s native token, Ether ($ETH).

According to Milkroad, a blockchain data aggregator, gas fees were slightly higher for token swaps, at $0.15, and for non-fungible token (NFT) sales, at $0.27. 

This has been attributed to the Pectra upgrade implemented in May, which has doubled the blob capacity of Layer 2 (L2) networks while reducing transaction fees on L2s by approximately 50%. More transactions were moved off the mainnet by this update, which further cut costs.

Additionally, Dencun, Ethereum’s latest major update, also reduced L2 transaction fees and shifted more transactions to the L1 layer. 

However, it is not the cheapest network yet.  New blockchain networks have offered much lower transaction fees and can process more transactions at higher speeds. The Solana network, for example, charges around $0.00025 per transaction as reported by Cryptopolitan.

US ETH spot demand slips

Demand for Ethereum from US investors has slowed considerably over the past week. The decline is quantified in a new report, which noted that Ethereum ETF inflows have nearly stalled since mid-August, underscoring subdued investor confidence.

On the other hand, Coinbase Premium indicators suggest that investors are showing less appetite for exposure to ETH. This metric tracks the difference between Ethereum prices on Coinbase and global averages. It has dropped close to zero. This signals a reduction in domestic buying pressure. 

Similarly, the six-month CME futures basis for ETH has fallen to around 3%, a three-month low that implies institutions are less willing to pay a premium for leveraged positions.

Analysts attribute the cooling demand to the closing of the Grayscale arbitrage opportunity that initially drew inflows when Ethereum spot ETFs were launched. The week ending September 26 saw record US redemptions of approximately $796 million, concentrated in Grayscale’s ETH.

As that arbitrage narrowed, much of the early migration from legacy products faded. Outflows resumed around October 23-24, with the week ending October 27 recording roughly $169 million in net redemptions across US Ether ETPs.

Broader macroeconomic conditions have also weighed on institutional risk appetite. Rising bond yields and uncertainty around US Federal Reserve policy have led investors to rotate out of higher-beta assets such as ETH. 

At the same time, Ethereum’s relative underperformance against some other crypto coins has reduced speculative interest among traders who had previously sought stronger momentum.

Ethereum’s historic pattern signals bullish trades as the year closes

Ethereum is entering November with cautious optimism. The second-largest crypto coin by market cap is down about 5% in the last 24 hours.

However,  historically, November has favored Ethereum, averaging 6.93% monthly gains, with 2024’s 47.4% rally marking one of its best months on record. To that end, analysts say that Ethereum’s November record leans bullish. 

🐳🦈 Ethereum whales and sharks holding between 100 to 10,000 $ETH are finally showing some signs of confidence. After -1.36M was dumped by this group between October 5th and 16th, they have added back close to 1/6th of it since. Positive sign for crypto's #2 market cap. pic.twitter.com/tg1BWu60Lq

— Santiment (@santimentfeed) October 24, 2025

This is supported by whales who are quietly building positions. According to Santiment, wallets holding between 1,000 and 100,000 ETH increased their balance from 99.28 million to 100.92 million ETH through October, steady buying even after a 7% monthly price decline. That’s akin to adding 1.64 million ETH, worth roughly $6.4 billion at the current price.

Meanwhile, the entire crypto market has fallen slightly after Jerome Powell, Chair of the Federal Reserve Board, hinted that a 25-point interest rate cut in October may be the last such cut of 2025. 

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