Bitcoin and Ethereum revenues surged in May despite challenges, per ETC Group report.

• In May, Bitcoin revenue increased by 249% YoY, while Ethereum network fees rose by 53.7%, according to a report by the ETC Group.
• Bitcoin and Ethereum saw growth in network revenues due to ordinals and enterprise adoption, respectively.
• Regulation and macroeconomics continue to impact the market, but major banks are becoming attracted to the benefits of tokenization.

The current market outlook for Bitcoin and crypto has been affected by the actions of the US Securities and Exchange Commission (SEC) after it sued Binance and Coinbase. Despite market headwinds in May, a new report suggests that revenue generation for Bitcoin and Ethereum’s networks remained strong.

Bitcoin and Ethereum network growth

German ETP issuer ETC Group’s report highlights a significant increase in network revenue for both Bitcoin and Ethereum in the past month. The report’s authors, Tom Rodgers and Hanut Singh, noted that despite continued headwinds, the total crypto market cap remained near $1.1 trillion.

On the macro level, the uncertainty around the US debt ceiling debate and the non-friendly approach by regulatory bodies like the US SEC and UK’s Financial Conduct Authority (FCA) impacted sentiment. However, there was noteworthy growth in terms of network revenue for the leading blockchains.

The ETC Group research team noted that revenues generated by Bitcoin and Ethereum rose substantially in May due to increasing user bases and new technological developments, such as ordinals for Bitcoin and increasing adoption for Ethereum enterprise solutions.

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Ordinals helped push Bitcoin revenue up 249% YoY in May

The ETC Group report states that the weekly revenue on the Bitcoin network increased by 249% YoY in May. This was largely driven by the spike in ordinals, which resulted in transaction fees amounting to 29.57% of monthly revenue for miners.

Ethereum network fees jumped 53.7% in May

In May, renewed interest in staking was visible for Ethereum, despite fears of a major withdrawal rout after the Shapella upgrade. The ETC Group report highlights that the supply of staked ETH on the mainnet rose from 14% to almost 20% at the end of the month. Monthly fees rose by 53.7%, from $241 million in April to $448 million in May, due to increased demand for Ethereum blockspace.

Crypto regulation in the US

The overall outlook on US crypto regulation remains largely hostile, even with bipartisan engagements. The SEC recently sued Binance and Coinbase, and the outcome of another high-profile case between the SEC and Ripple Labs over the XRP token is highly anticipated. However, Asia and Europe are emerging as strong destinations for crypto, with regulatory guidelines and rules that could make the bloc attractive to more US-based crypto businesses.

Tokenisation sees major banks eye blockchain adoption

In May, there was an increase in institutional interest in blockchain technology, mainly due to the growth in tokenisation.

The interest in blockchain peaked when State Street, the second-oldest bank in the US, suggested a move that could potentially bring $1.4 trillion worth of assets onto the blockchain by tokenising ETFs. The Bank of New York Mellon had also highlighted the benefits of tokenisation prior to this.

Citibank also shares this view and has suggested that tokenisation could bring up to $4 trillion worth of liquid and illiquid assets onto the blockchain.

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