Ethereum Network Fee Jumps 130% – What’s Driving the Surge?

Ethereum transaction fees have surged over 130% this week, driven by growing interest from institutional participants in decentralized finance (DeFi) applications and an uptick in smart contract usage.

Ethereum fees increased by over 130% this week, driven by institutional DeFi demand and higher smart-contract usage pic.twitter.com/7rHy9L6Koz

— Sentora (previously IntoTheBlock) (@SentoraHQ) June 27, 2025

On-chain data shows that Ethereum’s total network fees hit $10.26 million over the past seven days, reflecting a 130.4% weekly rise. ETH also rose 3.4% to $2,431, reflecting higher network activity and stronger market sentiment.

What’s Driving the Surge?

A tweet accompanying the data attributed the spike in Ethereum fees to two key drivers: increased participation from institutional entities in DeFi protocols and a rise in smart contract executions. Both activities are gas-intensive and contribute to higher transaction costs across the network.

Supporting this trend, exchange net flows for Ethereum showed a negative $293 million, indicating a significant volume of ETH being withdrawn from centralized exchanges. Such outflows often point to long-term holding strategies or the redeployment of assets into decentralized applications and staking platforms.

The surge in fees could also signal a renewed interest in Ethereum Layer-1 dApps, despite the availability of more affordable Layer-2 options. It could also hint at a gradual shift in capital from Bitcoin to Ethereum-based opportunities.

One such sign of this capital shift is Bit Digital’s plan to sell off its Bitcoin mining assets and reallocate funds toward accumulating and staking ETH. To support this move, the company raised $150 million through a public stock offering, issuing 75 million shares at $2 each.

The offering included an additional 11.25 million shares set aside for underwriters, giving them a 30-day option. Overall, the capital raised is intended to support Ethereum acquisitions and staking initiatives.

Ethereum Demand Builds

The spike in network activity and fees is happening amid a continued influx of institutional capital into Ethereum. Data from CoinShares shows that digital asset investment products generated $1.24 billion last week, marking the tenth consecutive week of inflows.

Notably, Ethereum accounted for $12 million of that total. It has now recorded nine straight weeks of institutional interest, with cumulative inflows reaching $2.2 billion. This steady demand suggests growing confidence in the largest altcoin, despite uncertain market conditions.

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