Ethereum Gas Fees Hit Record Lows as Institutional Demand for ETH Cools in 2025
- Why Are Ethereum Transaction Fees at All-Time Lows?
- What's Behind the US Institutional Pullback?
- Historical Trends Suggest Bullish November for ETH
- How Does Ethereum's Scalability Compare Now?
Ethereum's network fees have plunged to historic lows of just 0.16 gwei ($0.01 per transaction) amid declining institutional interest in ETH. While this signals improved scalability, it also reflects weakening demand from US investors following the initial hype around spot ETH ETFs. Meanwhile, ethereum shows seasonal bullish patterns heading into November - historically its strongest month with average gains of 6.93%.
Why Are Ethereum Transaction Fees at All-Time Lows?
Ethereum's gas fees have never been cheaper, with basic transactions costing just pennies in October 2025. This dramatic reduction stems from two key factors:
First, the Pectra upgrade in May doubled LAYER 2 blob capacity, slashing L2 fees by ~50%. Then the Dencun upgrade further optimized fee structures, migrating more activity from the mainnet. "We're seeing the cumulative effect of years of scalability work," notes BTCC analyst Mark Chen. "But ironically, lower fees coincide with cooling institutional appetite."
For comparison:
- Ethereum: $0.01 (basic transfer)
- Ethereum L2s: $0.001-$0.005
- Solana: $0.00025
What's Behind the US Institutional Pullback?
Coinbase Premium metrics reveal dwindling US institutional demand, with the ETH premium nearly vanishing. The Grayscale arbitrage opportunity that drove initial ETF inflows has dried up, resulting in record $796M weekly outflows in late September.
"Institutions are rotating out of crypto risk assets," observes Chen. "Between Treasury yields hitting 5% and Fed uncertainty, ETH's underperformance versus alternatives like SOL makes it less attractive." CME's ETH futures premium has compressed to just 3%, a three-month low indicating reduced Leveraged positioning.
Historical Trends Suggest Bullish November for ETH
Despite recent weakness, Ethereum has entered its seasonally strongest period. November has delivered average monthly gains of 6.93% historically, including a 47.4% surge in November 2024.
On-chain data shows whales accumulating:
- 1,000-100,000 ETH wallets added 1.64M ETH ($6.4B) in October
- 100-10,000 ETH holders reversed $1.36M in outflows
"This quiet accumulation during price dips mirrors previous cycle bottoms," notes Santiment's October 24 report.
How Does Ethereum's Scalability Compare Now?
While still not the cheapest network, Ethereum processes over 1.6M daily transactions (up from 1M earlier this year) at radically lower costs. The ecosystem handles this volume through:
- Mainnet optimizations (Pectra/Dencun)
- Layer 2 adoption (Arbitrum, Optimism now processing 60%+ of activity)
- EIP-4844's blob transactions
As developer Miguel Pereira puts it: "We've gone from 'ultrasound money' to 'reasonably-priced sound money' - and that's progress."
