Cryptocurrency analytics firm Kaiko Research has reported that gas fees on Ethereum recently hit a five-year low due to increased Layer 2 activity and a Dencun upgrade in March that reduced Layer 2 transaction fees. This fee reduction has a significant impact on Ethereum, as lower fees mean less ETH is destroyed, leading to an increase in token supply. The total supply of ETH has continued to rise since April. Despite demand drivers such as spot Ethereum ETFs, the growing supply could dampen potential price increases in the near term.