With Bitcoin currently trading at its highest price since the spring of 2022, it has lifted the entire crypto market. Among the top-gainers of the past 24 hours, several ERC-20 memecoins stand out for their Bitcoin-beating performance.
As the price of prominent meme tokens has increased, trading activity has exploded. But with an increase in the volume of transactions, Ethereum gas fees spiked to as high as 80 gwei on Tuesday, October 24, and have remained above average since.
In the last 24 hours, ERC-20 the number of memecoin transactions has surged in tandem with significant price gains for some of the most popular tokens.
Leading the charge, the volume of Pepe transactions increased by 220% over the course of a day, thanks to more than 14,000 individual transfers. During the same period, the token’s price increased by over 37%, helped along by news that the PEPE administrators had burned 6.9 trillion PEPE coins worth around $6M.
Meanwhile, over 8,700 Shiba Inu transfers have seen the token’s transaction volume increase by more than 86%, while the coin’s price jumped around 6%.
Away from the usual suspects, HarryPotterObamaSonic10Inu, which uses the ticker BITCOIN, could be on course to beat its August all-time high price of $0.19, having pumped nearly 40% in a day, clocking a 24-hour increase in transaction volumes of 188%.
While it would be a stretch to pin a spike in Ethereum gas fees on any single meme coin, collectively, an increase in ERC-20 transactions is almost certainly behind the recent increase in gas prices. Moreover, a notable overlap between previous periods of high fees and past memecoin frenzies points to a positive correlation between fee gas prices and memecoin trading activity.
Peaking just after 11 pm (UTC) on Monday, October 23, median gas fees briefly hit 80 gwei and have averaged 34.9 gwei during the past 24 hours.
In contrast, just 3 weeks ago, on October 8, the average Ethereum transaction fees dropped to 8.8 gwei, their lowest price since October 2022.
With the exception of Dogecoin, the most popular memecoins today utilize the ERC-20 token standard, and therefore incur Ethereum gas fees each time they are transferred from one address to another.
But gas fees aren’t fixed at a set rate. Instead, their price fluctuates dynamically according to the level of network activity. When the number of transactions being processed by the Ethereum mainnet increases, so do gas fees. Conversely, when network activity declines, gas prices get cheaper.
Considering that memecoins make up some of the most actively traded ERC-20 tokens, it follows that a spike in meme coin transactions could bump gas fees for the entire Ethereum network.