Ethereum Network Split: USDT Wallets Plummet as Fees Tumble
The Ethereum network is experiencing an unusual split, according to data from Santiment. Over the past 11 days, USDT has lost a significant amount of non-empty wallets on the Ethereum chain, with a decline of 251,350 wallets marking its steepest short-window drop since the post-FTX market upheaval in December 2022.
Meanwhile, Ethereum fees have fallen dramatically, plummeting from $0.72 on April 21 to just $0.095 per transfer, representing an 86.8% reduction. This decline is attributed to increased blob capacity and the expanded 60M gas limit, as well as the adoption of Layer-2 scaling solutions such as Arbitrum, Optimism, Base, and Linea.
The low Ethereum fees are creating a cheaper trading window for DeFi users, allowing them to rebalance positions, claim yield, or enter and exit smart-contract positions without incurring high gas costs. However, the sharp decline in USDT wallets remains a metric worth watching, as it may indicate that holders are de-risking their portfolios.
If mainnet USDT balances continue to shrink while overall stablecoin market capitalization stagnates, altcoin liquidity could face headwinds. For now, the Ethereum network is caught between improving execution costs and shifting liquidity behavior.