Ethereum trading volume and transaction count decline in August

Trading volume and daily network transactions on Ethereum ETH -0.74% have declined throughout August.

The Block's Data Dashboard indicates that the seven-day moving average of daily trading volume on the Ethereum network has declined by around 55% over the past month. The seven-day moving average of daily economic throughput on the Ethereum blockchain in U.S. dollar terms fell from $6.56 billion on July 26 to $2.9 billion today. While the monthly trading volume on Ethereum in July was $134.71 billion, August's trading volume currently stands at $91.46 billion, with five days left in the month.

Another indicator of economic activity on Ethereum also demonstrated a decline—the seven-day moving average of daily transactions on the Ethereum network has hit a multi-month low. On Sunday, there were around 1.07 million transactions on Ethereum. This marks a steady decrease from the multi-month peak of 1.32 million daily transactions recorded on March 25 of this year.

Furthermore, The Block's data shows that monthly transactions on Ethereum are at a multi-month low for August, although there are still five days left in the month. So far this month, there have been 27.27 million transactions on the blockchain — a low not seen since May 2020. In contrast, there were 35.49 million transactions in July.

Coinbase analysts view the August decline in trading volume and overall activity on Ethereum as part of a cyclical pattern, consistent with the historical summer lull. Analysts David Duong and David Han noted that this August's drop in blockchain activity is less pronounced than in previous years. "The decrease in ether trading volumes in August compared to the preceding three months has been a modest 7.7%, compared to the average 16.8% decline observed over the last five years," they explained.

Reduced institutional interest in Ethereum

One analyst pointed to the underperformance of spot Ethereum exchange-traded funds compared to their equivalent bitcoin products as an indicator of reduced interest from institutional traders.

According to BRN analyst Valentin Fournier, there has been a seven-day positive streak for bitcoin ETFs, while Ethereum lags despite decreasing outflows from Grayscale.  "This shows Ethereum is lacking interest from institutions and can partly be explained by the opportunity cost of the absence of restaking, and we recommend shifting a higher allocation toward bitcoin as we expect Ethereum to continue lagging," Fournier told The Block.

The price of ether decreased by 0.6% to $2,734 at 9:14 a.m. ET, according to The Block's Price Page .