The Revenue Divergence: Why Record-Breaking Ethereum Activity Isn’t Boosting ETH Price

Ethereum’s layer-1 network set all-time highs across every usage metric in Q1 2026, with monthly active users climbing 53.5% quarter-over-quarter to 13.2 million and transaction count reaching 200.4 million, even as ETH’s market cap dropped 30% and fees on the base layer fell nearly 50%.

But according to Token Terminal’s Q1 2026 Ethereum Report, the divergence between the rising activity and falling revenue is the whole point.

Ethereum Usage Hits Record Despite Falling Fees and Valuation

The report, published on June 17, showed the numbers splitting cleanly along two lines. On the usage side, everything went up, including active monthly users, which rose 85.9% year-over-year; transactions, which increased 81.5% YoY to just over 200 million; and throughput, which hit 25.78 transactions per second, an 81.7% jump YoY.

However, on the dollar side, things weren’t so glossy. Ecosystem total value locked averaged $316.2 billion, down 11% from Q4 2025 but still up nearly 23% year-over-year. Meanwhile, base layer transaction fees came in at $39.9 million, an almost 48% fall from the previous quarter and 81.9% below where they were a year ago.

Per Token Terminal, the fee compression had a direct cause, namely the Fusaka upgrade cycle’s second Blob Parameters Only fork (BPO #2) in January, which raised Ethereum’s data capacity and made blockspace cheaper. As a result, the transaction count went up 38% while total fees dropped by almost half in the same period.

Etherealize, the group that’s working to push Ethereum’s capabilities to traditional finance and a contributor to the report, framed it this way:

They are looking ahead to the Glamsterdam upgrade, which is targeting a more than 3x increase in the gas limit in Q3 2026, with Ethereum’s roadmap ultimately guiding toward 10,000 TPS and near-instant finality by 2029.

On Ethereum’s structural position in tokenized assets, the report noted that it had stayed largely intact through the quarter, with the total tokenized asset market cap averaging $203.4 billion, just 0.7% lower than the quarter before. However, it was up 42.9% year-over-year, with stablecoins leading at $178.9 billion, of which Tether’s USDT ($94.1 billion) and Circle’s USDC ($54.5 billion) accounted for the bulk.

Tokenized assets turned out to be the fastest-growing segment, increasing 60% QoQ and 325.9% YoY to $4.7 billion, most of which were represented by tokenized gold, that is, Tether Gold and PAX Gold. Tokenized funds also experienced similar growth rates, rising 5% to 19.4 billion within the period under discussion. Regulated institutional products from BlackRock’s BUIDL, WisdomTree, and Superstate were among the larger holdings, alongside yield-bearing on-chain dollar products from Sky and Ethena.

And out of the top 5 blockchain networks, Ethereum had a share of 71% of the total TVL, worth $316.2 billion, against the $129 billion on Tron, Solana, BNB Chain, and Plasma collectively. It also holds more than 79% of active DeFi loans, nearly 62% of stablecoins, and 73% of tokenized funds, as well as 84% of tokenized commodities.

However, DEX trading volume was the one area where Ethereum did not lead, with BNB Chain processing $162.5 billion against its $134.5 billion, as Solana came third after pulling in $104.9 billion.

ETH Price Under Pressure

Interestingly, none of the activity described above translated into price strength for Ethereum’s native token. For one, the coin’s fully diluted market cap averaged $290 billion in Q1 2026, which was a 30.3% dip QoQ and almost 10% across one year.

At the time of writing, it was sniffing around the $1,700 level after briefly hitting a 14-month low near $1,500 earlier in June before recovering somewhat on news of a peace deal between the United States and Iran.

Analyst sentiment regarding it is divided, with some like Daan Crypto Trades noting that ETH is on track for its second-worst first half of the year since 2022 after a 29% plunge in Q1 and another 21% decline so far in Q2. That puts it on course for three double-digit quarterly losses in a row.

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