Blockchain network Ethereum is on track to achieve $1 billion in annualized profits, with a Q1 net income of $365 million, marking a staggering 155% year-on-year quarterly revenue growth.
Ethereum’s fee revenue, generated from user transactions, reached $1.17 billion, reflecting a 155% increase from Q1 2023 and an 80% rise from the previous quarter.
The significant increase in network activity, particularly driven by a surge in DeFi (Decentralized Finance) activity during the quarter, was cited as the primary reason behind the revenue growth.
Average daily transactions on the Ethereum blockchain in 2024 have already exceeded last year’s figures and are approaching the levels seen during Ethereum’s peak in 2021, with over 1.15 million average daily transactions recorded.
Ethereum’s profitability turnaround, starting from 2023, can be attributed to the transition to proof-of-stake consensus in September 2022, which significantly reduced token incentives paid to miners (now validators).
Market analyst Michael Nadeau predicts a bullish outlook for the crypto market, suggesting that crypto will outperform other asset classes.
Nadeau points to rising liquidity conditions, U.S. Bitcoin exchange-traded funds (ETFs), the Bitcoin halving, and the ongoing innovation cycle as key catalysts for the bullish setup in the coming years.
Bitcoin ETFs are expected to drive increased interest in cryptocurrencies by providing broad access, while the upcoming Bitcoin halving is historically associated with a bull run in the following year.
Nadeau highlights the correlation between Bitcoin and Ether, suggesting that while Bitcoin outperforms early in the bull market, Ether and altcoins tend to outperform in later stages. Altcoins with clear product-market fit are expected to continue outperforming Bitcoin across market cycles.
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