Leading smart contract platform Ethereum (ETH) is showing signs of growth despite its underperformance and the regulatory uncertainty surrounding it, according to market intelligence firm IntoTheBlock.
In a new article, the head of research at the crypto analytics platform says that Ethereum volumes are reaching levels they haven’t seen in years, signaling growth.
“Ethereum has been subject to criticism by many over the past few months. Within crypto, people point to ETH’s price underperforming and traction on Solana as a sign of Ethereum losing its mojo. Beyond crypto, regulators are now reportedly cracking down on the Ethereum Foundation and going after ETH as a security.”
According to IntoTheBlock, this week, the amount of ETH transferred on its mainnet reached its highest point since May 2022 while the amount of ETH on layer-2 scaling solutions recently surpassed 10 million for the first time ever.
IntoTheBlock says that activity on layer-2s Arbitrum (ARB), Optimism (OP), and Base (BASE) is going at over twice the rate than it is on Ethereum’s mainnet. Furthermore, the market intelligence firm says that since ETH’s fees dropped 90% after the Dencun update on March 13th, activity on layer-2 blockchains should ramp up even more.
However, IntoTheBlock does acknowledge that Ethereum has lagged behind crypto king Bitcoin (BTC) and the S&P 500 this cycle.
“Price-wise, there is an argument to be made against ETH relatively lagging behind so far this cycle. However, in terms of on-chain data, Ethereum continues to grow.”
Earlier this month, Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), declined to comment on whether Ethereum counts as security or a commodity, adding to the regulatory uncertainty surrounding the second-largest digital asset by market cap as the regulatory agency is still in the process of deciding whether or not to approve several bids to create ETH-based exchange-traded funds (ETFs).
Ethereum is trading for $3,333 at time of writing, a 3.75% decrease during the last 24 hours.
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