Ethereum's record activity: Genuine demand or an artifact derived from spam attacks?

Ethereum is breaking records in on-chain transaction activity, but the reality behind these challenging numbers reveals a more complex story. The network processed nearly 2.9 million transactions in a single day just over a week ago, hitting all-time highs that should indicate a healthy and expanding network. However, as the transaction volume indicator reaches new highs, the market seems skeptical: Ethereum is trading around $2.77K as of January 29, 2026, registering a 7.98% drop in the last 24 hours and a 5.94% drop in the last seven days.

This disconnect between the peaks of on-chain activity and the moderate price performance suggests that the increase in transactions may not reflect true user demand. Research by blockchain data analysts reveals a less optimistic picture: roughly 80% of the unusual growth in new Ethereum addresses is tied to small transfers of stablecoin “dust,” a phenomenon that changed radically after transaction fees dropped significantly.

The Ethereum Enigma: Historical Numbers That Mask a Disturbing Reality

The increase in activity appears to be largely driven by sophisticated address poisoning campaigns, where scammers seek to trick users using an increasingly prevalent technique. In these attacks, criminals generate wallet addresses that closely resemble legitimate ones and send small transfers of stablecoins, often under $1, to potential victims.

The mechanism is ingenious: those dust transactions insert fake addresses into a user’s transaction history, where wallets typically display only abbreviated prefixes and suffixes. When users later copy an address from that history without verifying each character, they can inadvertently send real funds to the attacker’s fraudulent address, transforming a seemingly routine activity into a costly mistake.

On-Chain Analysis: How Stablecoin Dust Dramatically Inflates Transaction Count

Detailed analysis of the activity shows that stablecoins account for about 80% of the unusual growth in new Ethereum addresses. When examining initial interactions with these assets, approximately 67% of newly active addresses received less than $1 as their initial transfer, a pattern consistent with automated “dusting” operations rather than organic user onboarding.

In concrete numbers, roughly 3.86 million out of 5.78 million addresses in the sample analyzed received what the researchers classify as contaminating dust in their first stablecoin transaction. These numbers put into perspective what at first glance appeared to be a mass adoption phenomenon.

To trace the source of this activity, analysts tracked USDT and USDC transfers under $1 and identified issuers that distributed dust to at least 10,000 unique addresses. The largest of these were smart contracts that sent small amounts of stablecoins to hundreds of thousands of wallets, funded by a feature designed to fund large batches of tainted addresses in a single transaction.

The Attack Economy: How Low Fees Changed Everything

The determining factor in the escalation of these attacks was the dramatic change in the economics of Ethereum transactions. Attackers appear to be intensifying address poisoning due to considerably lower transaction fees since early December, thanks to the Fusaka upgrade. These lower fees have made it economical enough to send millions of low-value “powder” transfers.

Prior to this update, a scam that relied on a handful of large bugs and had an inherently low probability became an economically viable strategy on a massive scale. When the cost per transaction is reduced exponentially, what was once unlikely to be profitable now becomes attractive to perpetrators.

This context significantly complicates the optimistic narrative derived from the activity records on Ethereum. Low fees and smooth workflow may indicate technical network resilience, but simultaneously make it cheaper to run spam. If a significant portion of the activity is low-value noise, then the increase in the number of transactions says less about the actual demand for block space, the adoption of decentralized applications, or the fundamentals of Ethereum itself.

Global markets under pressure: Bitcoin, Ethereum and risk assets in correction

Bitcoin: Bitcoin traded around $83.53K as of Jan. 29, 2026, posting a 0.95% drop in the last hour and 6.52% in 24 hours, extending losses of 6.50% in the last week and 5.41% in the last month.

Ethereum: Ether remained around $2.77K, down 2.07% in the last hour and 7.98% in the last 24 hours, continuing its decline of 5.94% in the last week and 6.97% in the last month.

Gold: Gold soared to an all-time high near $4,675 in early Asian trading as Trump’s threats of tariffs on eight European countries stoked fears of a global trade war. This demand for safe-haven assets remained firm even as strong U.S. data pushed back expectations for Federal Reserve rate cuts until 2026. Wall Street analysts on average forecast that gold will be around $5,180 in 2026, implying an approximate gain of 19.3% from the close of 2025.

Nikkei 225: Japan’s Nikkei index fell about 0.7% while 40-year government bond yields hit new highs. Asia-Pacific markets traded cautiously amid U.S.-European Union tariff tensions over Greenland, as well as growing political uncertainty ahead of a potential snap election in Japan.

NFTs and altcoins: mixed signals in the crypto ecosystem

In other developments within the cryptocurrency ecosystem, Ethereum founder Vitalik Buterin has voiced his call for “different and better DAOs,” suggesting that decentralized governance still has a long way to go.

Contrary to reports of the NFT market disappearing, analysts point out that wealthy cryptocurrency collectors continue to be significant drivers of the segment. Pudgy Penguins is emerging as one of the strongest NFT-originating brands in this cycle, evolving from what were speculative “digital luxury goods” to a multi-vertical consumer intellectual property platform.

The project’s strategy is to acquire users through conventional channels first (toys, retail partnerships, and viral media), and then onboard them into Web3 through games, NFTs, and the PENGU token. The ecosystem now encompasses phygital products (with over $13 million in retail sales and over 1 million units sold), games and experiences (Pudgy Party surpassed 500 thousand downloads in two weeks), and a widely distributed token (airdropped to over 6 million wallets).

XRP: Ripple’s XRP saw an approximate 6.42% drop in 24 hours, falling from $1.91 to $1.79. The correction in bitcoin sparked a widespread sell-off in high-risk assets among high-beta tokens. The decline accelerated once XRP broke the key support around $1.87 with elevated volume, erasing the previous week’s gains before buyers stepped in near $1.78–$1.80.

Traders now consider $1.80 as a crucial support level, with a sustained move above approximately $1.87–$1.90 being necessary to signal a correction in the pullback rather than the start of a deeper decline.

Perspective: when the technical tops hide economic realities

Until it becomes clearer what proportion of Ethereum’s activity reflects real users versus automated attacks, the highs in gross transactions appear to be a misleading signal rather than a genuine catalyst for price growth. The market, apparently, has come to the same conclusion: record activity has not translated into stronger fundamentals based on the price reaction observed.

The case of Ethereum illustrates an important lesson in blockchain analysis: raw numbers on the surface can tell a completely different story than the one told by deep data. In this market cycle, the sophistication of onchain analysts is just as important as the sophistication of attackers.