Cryptocurrencies are all the hype in 2022. Alongside Bitcoin, Ethereum (ETH) remains the second most popular among them all.
And it’s clear to see why, as ETH is the commonplace currency used for many popular digital asset transactions, including non-fungible tokens (NFTs) and future Metaverse creations.
The highest transaction fees for Ethereum in 2020 were between 2 and 6 p.m. UTC. Although this Data is old, it is still valid today, and to get the lowest Ethereum gas prices, perform transactions in the early morning at between 1 to 3 am or late at night between 9 and 11 pm UTC.
However, despite its vast utility, ETH is also known to be costly in gas, which is reflected in the transaction price you pay when trading along the network.
So, in this article, we’ll be exploring when Ethereum gas prices are at their lowest, followed by the reasons for why they’re high so that you know in the future when’s best to avoid and trade using the ETH blockchain.
When are Ethereum gas prices at their lowest?
To begin with, we need to understand why ETH uses so much gas in the first place. The value of ETH is almost purely based upon the forces of supply and demand, and in order for the blockchain to uphold this, ‘miners’ must solve computational algorithmic puzzles to register transactions on the blockchain. For doing this, they are rewarded with ETH.
So, quite simply, the more mining and transactions that are occurring simultaneously on the blockchain, the higher the gas fee prices.
Consequently, to know when Ethereum gas prices are at their lowest, you need to ensure you’re doing transactions at non-peak hours of the day.
In 2020, the highest transaction fees on Ethereum were recorded between 2 and 6 pm UTC. Although this data is from two years ago, it will still be similar today.
Therefore, if you want to pay the lowest Ethereum gas prices, you should perform transactions early in the morning, between 1 and 3 am UTC, or late at night, between 9 and 11 pm UTC.
Ethereum gas prices tend to be lower on Saturdays and Sundays as fewer people are working than during the week, so these may be the best times to take advantage of low Ethereum gas prices.
In essence, as with most things in life, try to avoid times when most people tend to work.
What are some more particular reasons for high and low Ethereum gas prices?
As discussed, gas fees are necessary to process transactions on the Ethereum network. However, even with the plethora of miners keeping the network up and running, high activity and large transactions can sometimes completely cause it to halt. This commonly happens when the following are traded:
- DeFi (Decentralized Finance)
As a prerequisite, it’s important to know that Ethereum can only perform an average of 15 transactions per second, so anything that demands higher attention of the network than this can quickly cause Ethereum gas prices to surge.
ETH was the foundational network used to create smart contracts, the technology that is now commonly used for many DeFi applications. However, as the number of DeFi apps created on the ETH network went up, so did Ethereum gas prices as the network quickly became congested.
To put this into perspective, Ethereum gas prices increased more than 20 times over the course of 2020, with DeFi apps being a major culprit for these increases.
Think about how many transactions are made in the NFT realm. Trading, minting and simply registering and owning in and of itself, all require Ethereum to operate.
A great example of when an NFT project caused gas prices to rise was in 2017 when the = CryptoKitties DApp launched. As a result of thousands of users using the app simultaneously, the Ethereum network was completely clogged.
Consequently, Ethereum gas fees soared from 0.002 ETH all the way to 0.008 ETH to use the app. The Ethereum network as a result reached an all-time high transaction number and significantly slowed down the overall network.
In summary, Ethereum gas prices will always be the lowest at non-peak hours of the day and particularly at weekends. Therefore, to take advantage of this, try to always plan when in the day Ethereum gas prices will be at their lowest, for example, early in the morning or late at night, before engaging in the ETH blockchain.
It’s also a good idea to consider if there’s a major ETH based asset launching at the time you’re planning on using the network, such as a major NFT collection dropping, or an app launching, as doing so during these times will significantly increase the gas price you’ll have to pay.