Ethereum Gas Fees Hit Record Lows as Institutional Demand for ETH Stalls in 2025
- Why Are Ethereum Gas Fees at Historic Lows?
- What's Behind the US Institutional Pullback?
- How Does Ethereum Stack Up Against Competitors Now?
- Will History Repeat With November's ETH Rally Pattern?
- Ethereum Market Dynamics: Your Questions Answered
Ethereum's network has reached a pivotal moment in 2025, with gas fees plunging to unprecedented lows of just 0.16 gwei (≈$0.01 per transaction) - signaling improved scalability but revealing weakening institutional interest. While layer-2 solutions like Pectra and Dencun upgrades have slashed costs by 50%, competitors like Solana now offer transactions at 0.00025¢. Meanwhile, US spot demand shows alarming signals: Coinbase Premium metrics flatlined, CME futures premiums dropped to 3-month lows, and Grayscale outflows hit $796M in late September. Yet historical patterns suggest November could bring a 6.93% average ETH price surge, with whales accumulating $6.4B worth of ETH in October despite market headwinds.
Why Are Ethereum Gas Fees at Historic Lows?
The ethereum blockchain has achieved its most affordable transaction costs ever recorded, with base fees hovering around 0.16 gwei ($0.01) as of October 2025. This milestone comes courtesy of two critical network upgrades:
First, May's Pectra update doubled layer-2 data storage capacity while reducing L2 fees by approximately 50%. Then September's Dencun hard fork further optimized transaction bundling. "We're seeing the cumulative effect of years of scalability research," notes BTCC analyst Mark Chen. "What used to cost $50 during 2021's NFT boom now costs pennies."
Daily transactions tell the story - averaging 1.6 million this week compared to 1 million pre-upgrades. But there's irony here: while Ethereum finally delivers on its "cheap transactions" promise, institutional players seem to have lost interest.
What's Behind the US Institutional Pullback?
Stateside ETH demand has hit concerning stagnation since mid-August, with three red flags emerging:
1.: The spread between Coinbase's ETH price and global averages has nearly vanished, indicating dwindling US buyer pressure.
2.: CME's 6-month ETH futures basis rate cratered to 3% - its lowest since July - suggesting institutions won't pay premiums for Leveraged positions.
3.:
| Period | Outflows | Focus |
|---|---|---|
| Week ending Sept 26 | $796M | Grayscale ETH |
| Week ending Oct 27 | $169M | US ETPs |
"The Grayscale arbitrage play is exhausted," explains Chen. "Combine that with 10-year Treasury yields sucking capital from crypto, and you've got a perfect storm for ETH."
How Does Ethereum Stack Up Against Competitors Now?
While celebrating its cost improvements, Ethereum still gets undercut by newer chains:
- Ethereum: $0.01 (base), $0.15 (token swaps), $0.27 (NFTs)
- Solana: $0.00025
- Avalanche: $0.002
Yet Ethereum's $6.4B whale accumulation in October suggests big players see value others miss. "The network effects are undeniable," argues crypto podcaster Elena Petrova. "Where else can you execute complex smart contracts with this security?"
Will History Repeat With November's ETH Rally Pattern?
Ethereum enters November 2025 down 5% daily but with bullish seasonal winds:
- Average return: +6.93%
- Best year (2024): +47.4%
Santiment data reveals whales (100-10K ETH holders) bought back 16% of their October sales. Meanwhile, 1K-100K ETH wallets grew holdings by 1.64M ETH ($6.4B) last month despite prices dipping 7%.
"It's the crypto version of 'be fearful when others are greedy,'" quips trader Raj Gupta. "While retail panics about Fed rates, OGs are loading up."
This article does not constitute investment advice.
Ethereum Market Dynamics: Your Questions Answered
Why did Ethereum gas fees drop so low?
The combination of Pectra's layer-2 storage expansion and Dencun's transaction bundling efficiency allowed more activity to MOVE off the mainnet, dramatically reducing congestion and fees.
Are institutions abandoning Ethereum?
Not abandoning, but certainly cooling - Grayscale outflows and CME basis rates show reduced enthusiasm, though $6.4B in whale accumulation suggests sophisticated players see long-term value.
How do Ethereum fees compare to Solana?
Ethereum's $0.01 base fee remains 40x higher than Solana's $0.00025, though complex operations like NFT sales show wider gaps ($0.27 vs Solana's sub-penny costs).
What's the November outlook for ETH?
Historically Ethereum's second-strongest month (average +6.93%), though 2025 faces unique headwinds from Fed policy and institutional outflows that may mute typical seasonal effects.
