Ethereum has recorded a sharp rise in daily transactions and active addresses, but analysts at Citigroup say the increase is likely being driven by scam related activity rather than genuine network growth. According to the bank’s latest analysis, a large share of new transactions on the Ethereum network are valued at less than one dollar, a pattern commonly associated with address poisoning campaigns. These scams involve sending tiny amounts of crypto from wallet addresses designed to closely resemble those used by victims, increasing the risk of mistaken transfers in future transactions. Low transaction fees on Ethereum have made it easier for malicious actors to generate high volumes of this activity, inflating headline metrics without reflecting real user demand or economic use.
A deeper look at on-chain data shows that much of the recent activity consists of automated micro transfers rather than organic interaction. Analysts noted that address poisoning campaigns typically rely on scale, distributing small amounts of tokens across thousands of wallets to maximize the chance of confusion. The current environment of low fees has reduced the cost of executing these strategies, allowing attackers to operate more aggressively. While network dashboards show record highs in transaction counts, the underlying value being transferred remains minimal in many cases. This disconnect suggests that raw activity figures may be overstating the true health of the Ethereum network at a time when adoption narratives are under close scrutiny.
Independent on-chain researchers have linked the surge in activity to stablecoin movements rather than decentralized application usage. Research indicates that transfers of small amounts of USDT and USDC account for a large share of the unusual growth in new addresses. In several cases, smart contracts were observed distributing tiny stablecoin amounts to hundreds of thousands of wallets, funded through batch mechanisms designed to scale poisoning campaigns efficiently. These patterns point to coordinated behavior rather than individual users joining the network. As a result, analysts caution against interpreting the recent spike as a sign of renewed momentum or expanding user adoption.
Despite the burst in on-chain metrics, Ethereum’s price performance has remained subdued relative to Bitcoin. Ether has been largely flat this year, while bitcoin has posted modest gains over the same period. The divergence reinforces concerns that the activity spike is not translating into stronger market confidence. Citi analysts noted that bitcoin’s on-chain activity has continued to trend slightly lower rather than showing a similar surge, underscoring that Ethereum’s pattern appears network specific. The findings add to broader skepticism among large financial institutions about the durability of Ethereum’s recent activity rebound amid rising competition and evolving network dynamics.
