• Ethereum prices have been in a lull for five months as volume and volatility dwindle.
• However, fundamentals for the asset and network are strong with major companies such as PayPal using Ethereum to launch their products.
• Layer 2 networks on Ethereum are also growing at an accelerated pace with total value locked increasing by 150%.
Ethereum Prices Languish Despite Bullish Fundamentals
Ethereum prices have been trading sideways for the past five months, with little activity or volatility to be found. Nevertheless, underlying fundamentals of the asset and network remain strong despite these market conditions. On Aug. 11, crypto industry analyst Miles Deutscher highlighted some of the bullish factors underpinning Ethereum’s prospects.
Major Companies Choose Ethereum
Deutscher noted that some of the world’s largest companies have chosen to use Ethereum when launching their products. This includes payment giant PayPal who recently announced its own stablecoin launching on the network. Furthermore, Worldcoin is also utilizing Ethereum which could lead to increased gas consumption if its digital ID project is successful.
Layer 2 Networks Growing Rapidly
The layer two ecosystem built atop of Ethereum is also expanding rapidly. Coinbase’s Base launched on layer two earlier this year and since then the Total Value Locked (TVL) across all layer-two networks has surged by 150% reaching an all-time high of $10.5 billion according to L2beat data. In addition, EIP-4844 is expected soon which could reduce transaction costs significantly .
Increased Use Cases
Deutscher added that applications leveraging blockchain technology beyond financial services are being explored more actively than ever before, ranging from digital identity solutions to decentralized energy markets . These new use cases could see further adoption in 2021 with more developers building on top of Ethereum’s infrastructure .
Overall, there appears to be a number of bullish fundamentals underpinning Etherum’s prospects despite its current market stagnation . With major companies leveraging its technology , an expanding layer two ecosystem , and increased use cases , it seems like 2021 could bring renewed optimism for the asset .