The Ethereum network reported a robust income of $365 million in the first quarter of 2024, an impressive year-on-year revenue growth of 155%. 

According to a report by Michael Nadeau, an analyst at The DeFi Report, Ethereum’s Q1 income represents a staggering 200% increase compared to the $123 million profit recorded in Q4 2023.

A major contributing factor to this substantial growth was the surge in decentralized finance (DeFi) activity during the quarter, driving heightened network participation.

Ethereum Fee Revenue Reaches $1.17B in Q1

Ethereum’s fee revenue, generated through user transactions, reached a notable milestone of $1.17 billion in Q1, marking a remarkable 155% increase from the same period in 2023 and an 80% upswing from the previous quarter. 

The amplified network activity, fueled by the surge in DeFi applications, has propelled Ethereum’s average daily transactions in 2024 to surpass last year’s figures.

The current average of 1.15 million daily transactions is in close proximity to the peak levels witnessed during Ethereum’s momentous run in 2021.

It is worth noting that Ethereum, which was launched in 2015, achieved its first profitable year in 2023, amassing $623 million in revenue. 

Despite the revenues being significantly lower (75%) than the peak of $9.9 billion attained in 2021, this achievement can be attributed to the transition to a proof-of-stake consensus in September 2022, resulting in a substantial drop in token incentives paid to miners, now known as validators.

Cryptocurrencies to Outperform Other Assets

Nadeau said that “crypto will outperform everything else” in the coming years. 

He anticipates favorable liquidity conditions for the next few years, driven by the need for refinancing a substantial amount of debt in the United States and the market’s expectation of three rate cuts from the Federal Reserve. 

These factors are poised to provide a tailwind for risk assets like tech stocks and quality cryptocurrencies.

Nadeau identified three additional catalysts that indicate a bullish setup for the crypto market. 

Firstly, the introduction of U.S. spot Bitcoin exchange-traded funds (ETFs) is expected to increase interest and accessibility to cryptocurrencies. 

Secondly, the upcoming Bitcoin halving, scheduled for April 20, has historically prompted a bull run in the subsequent year. 

Lastly, Nadeau highlighted the ongoing innovation cycle, which he believes will attract new venture funding and reignite retail interest in crypto as the industry matures.

While Bitcoin typically outperforms in the early stages of a bull market due to its widespread recognition, Nadeau noted that Ethereum and altcoins tend to outperform Bitcoin in the later stages of the cycle. 

Altcoins, which have a clear product market fit, have demonstrated substantial growth in the previous cycles, surpassing Bitcoin’s performance across the entire duration.

Meanwhile, the Ethereum network has surpassed one million validators, with approximately 32 million Ether, worth around $114 billion, staked within the network.

As reported, data from the Dune Analytics dashboard, which tracks Ethereum staking progress, show that the validator count reached the one million mark on March 28. 

The 32 million ETH staked represents approximately 26% of the total supply, highlighting the substantial commitment to Ethereum’s proof-of-stake (PoS) consensus mechanism.

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