Ethereum’s weekly fee revenue dropped from more than $200 million to roughly $10 million following the Dencun network upgrade in March 2024, according to recent CoinShares research. Meanwhile, monthly active users roughly doubled over the same period.

Key Takeaways:

• CoinShares projects a base-case ether price of $4,935 by 2031, representing a 16% annualized return.
• Ethereum’s weekly fees fell from more than $200 million to roughly $10 million after the March 2024 Dencun upgrade.
• A Q3 2026 upgrade called Glamsterdam could expand Ethereum’s transaction capacity 3.3 times.

CoinShares senior Ethereum research associate Luke Nolan argued that the market’s difficulty pricing ether stems from treating it as only one thing. The report broke ether’s value into two components: a cash-flow model projecting network fee revenue across eight categories, and a “monetary premium” reflecting ether’s role as the primary collateral and settlement currency of the largest smart contract ecosystem.

See more: Bitcoin, Ethereum, Solana, BNB, & Hyperliquid: What Sets Them Apart

That combined approach yields a base-case price of $4,935 per ether by 2031, a 16% annualized return from current spot, according to the report.

Under the cash-flow model, decentralized exchange (DEX) trading, where users swap crypto assets directly on-chain without an intermediary, is the single largest revenue contributor, according to the report. Stablecoin transfers rank second, with Ethereum currently hosting about 52% of total stablecoin supply, above $300 billion in total circulation.

In a bear scenario, Ethereum’s share of total DEX volume contracts to 11% as competing blockchains capture activity, while the base case holds that share at 20%, according to CoinShares. The bull case has it expanding to 35%.

Ethereum Upgrade Could Reshape Fee Outlook

Ethereum’s gas limit, which governs how many transactions can fit in each block, doubled from 30 million to 60 million over the past year, the first such increase since 2021, the report noted. The Glamsterdam upgrade, currently scheduled for the third quarter of 2026, could push that ceiling to 200 million, a 3.3x increase, alongside parallel transaction processing.

CoinShares invoked the Jevons paradox in connection with that potential expansion. In theory, the concept holds that cheaper resource use can drive total consumption higher rather than lower, with new use cases potentially growing total fee revenue even as individual transaction costs fall.

Six structural demand sources make up the monetary premium framework, including ETF inflows, which CoinShares projected reaching $25 billion annually in the base case by 2031. Among the products in that space, the CoinShares Bitcoin and Ether ETF (BTF) packages both assets in a single fund, with $14.5 million in assets under management and a 1.27% expense ratio, according to ETF Database.

CoinShares assigned the highest probability to an outcome between the base and bull cases. Under the bull scenario, where ether hits $14,135 by 2031, the report projected total global stablecoin supply growing to $2.8 trillion, more than nine times the current total.

For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.