Blockchain network Ethereum is on its way to $1 billion in annual profits after it achieved net income of $365 million in the first quarter, accompanying quarterly revenue growth of 155% year-on-year. According to an April 17 report by The DeFi Report analyst Michael Nadeau, the network's first-quarter revenue in 2024 was up nearly 200%, compared to a profit of $123 million in the fourth quarter of 2023.
Ethereum's fee revenue - generated by users paying for transactions - reached $1.17 billion, up 155% from the first quarter of 2023 and up 80% from the previous quarter.
Nadeau said that the reason for the increase in revenue was increased network activity "mainly due to the increase in DeFi activity in the quarter."
The increase in activity has already pushed the blockchain's average daily transactions in 2024 above last year's figures, and is approaching Ethereum's peak performance in 2021.
In 2024, there were an average of more than 1.15 million transactions per day, up slightly from the 1.05 million last year and just above the 1.25 million recorded in 2021.
Ethereum was launched in 2015, but didn't have its first profitable year until 2023. - bringing in $623 million - despite the fact that its revenue that year was 75% lower than its maximum 2021 revenue of $9.9 billion.
"This is mainly due to the passage of the rate proof consensus in September 2022, in which the token incentives paid to miners (now validators) fell by about 80%," - Nadeau explained.
He added that Ethereum fees have increased at a rate of 58% since 2017.
"Crypto will perform better than everything else" in the coming years
Nadeau outlined his market forecasts for the coming years and said that "crypto will perform better than everything else."
He expected liquidity conditions to increase in the "next few years," as the United States has a large amount of debt requiring refinancing this year, and the market has priced in three interest rate cuts by the Federal Reserve this year.
"This should provide tailwinds for risky assets such as technology stocks and high-quality cryptocurrencies."
U.S. spot Bitcoin exchange-traded funds, halving Bitcoin and what Nadeau called the "innovation cycle" are three additional catalysts "pointing to a bullish setup for the next few years."
