Latest data from DollarGeek, Nasdaq and Ycharts have reflected the growing dominance of Ehtereum network in the crypto market in 2022 as Ethereum recorded more than fourfold transactions over Bitcoin, the most popular cypto platform.
Specifically, data from Nasdaq and Ycharts shared on Reddit on January 2 showed that there were 338% more Ether transactions in 2022, totalling 408.5 million than Bitcoin’s 93.1 million.
However, according to google trend searches, Bitcoin managed to stay ahead of other competitors when it comes to online search interest as about 28.41 million people googled Bitcoin during the year.
The market showed that the Ethereum blockchain averaged a daily transaction count of around 1.1 million for ETH, compared to Bitcoin’s network’s 255,000 for BTC.
The data further showed that though the Ethereum network led the charge, transaction volumes on the Bitcoin network were steadier and more periodic than on the Ethereum network, which experienced much more volatility in transaction volumes.
Analysts attributed the trend to spikes in demand at certain times such as NFT launches and other gas fee-intensive events such as XEN minting.
A further analysis of Ether’s performance during the year in review reflected that Ether, the native token of the Ethereum network, experienced supply drop since October 8., 2022 which marked the Ethereum network’s first deflationary move.
The deflationary trend occurred when the network switched from proof-of-work (PoW) to proof-of-stake (PoS) via the Merge in September 2022.
After the update, a portion of the Ethereum network gas fee, otherwise known as the transaction fee, is permanently removed from the Ether circulation. Simply put, more ETH gets burned in a high-demand environment.
Nasdaq and Ycharts noted that the Ethereum network’s deflationary functionality started after October 8, when a new crypto project named XEN Crypto increased network traffic.
At the time, XEN Crypto accounted for the burning of 4,490 ETH tokens against 16,690.52 ETH tokens on the day, which represents 26.90% of the total transactions burned.
According to the market research data, it is believed that people’s interest in Bitcoin remains relatively high as experts assess quality compared to other crypto assets in the industry.
For instance, CNBC reported that Venture capital investor, Tim Draper, explained that weaker coins will become relics amid the ongoing crypto winter, benefitting BTC.
The analyst noted this was an indicator that the top cryptocurrency could reach $250,000 per token.
According to Bitinfocharts, Ethereum’s heftier transaction volumes have continued into the New Year, with the Ethereum transaction count on Jan. 2 reaching 924,614, a 300% increase compared to Bitcoin’s 229,191 on the same day.
The analyst who posted the metrics explained that he was sceptical about people saying that a “flippening,” could happen someday, and further added that those advocating for it have reason to do so now.
A flippening occurs when one chain surpasses a higher-ranked one for the same metric, in this case, transactions and activity.
While there is a clear distance between Ethereum and Bitcoin’s transaction volumes, the distance could be more significant than we are reading. This is because the charts do not include layer 2 transactions, which would put Ethereum even further ahead of Bitcoin for this metric.
L2beat reported that the number of L2 transactions per second actually surpassed those on layer 1 Ethereum in mid-October and has remained above it ever since.
