Ethereum’s (ETH) momentum might be set for a change, as on-chain fundamentals are strengthening, according to the “On-chain Insights” newsletter from on-chain analysis firm IntoTheBlock. The newsletter highlights the criticism towards ETH in recent months both within crypto over underperformance versus Bitcoin (BTC) and in the mainstream over speculation of it being deemed an unregistered security.
Lucas Outumuro, head of research at IntoTheBlock, says the underperformance is real. The ratio of ETH to BTC recently hit 0.05, near its lowest point since June 2022, and ETH has lagged both Bitcoin and the S&P 500 in risk-adjusted returns.
Yet Ethereum’s daily average transfer volume on mainnet reached its highest level since May 2022 this week. Moreover, layer-2 (L2) activity has boomed, with over 10 million ETH now deposited and transactions more than double mainnet’s.
Outumuro assesses that the lower fees post-Dencun should drive further L2 growth and that the bettering of the fundamentals didn’t go unnoticed by long-term ETH investors.
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