Ethereum transactions near 2021 highs – Will ETH prices follow?
- ETH network traction surged to nearly 2021 levels.
- Tom Lee termed this growth as the ETH’s ‘usefulness’.
Ethereum [ETH] has seen a remarkable recovery in network activity, signaling renewed market interest.
On-chain data now shows daily transactions on the chain have jumped over 1.2 million to near 2021 highs.
Source: X
The network activity surge coincided with the ongoing ETH treasury frenzy, stablecoin, and tokenized stocks narratives.
But most importantly, the network growth followed recent scaling upgrades like Pectra.
Positive for ETH price?
In fact, per Ethereum developer Arjun Bhuptani, the uptick in network traction is linked to the recent scaling upgrades. He cited the current low-cost gas fees or transaction charges on the chain.
“Daily transactions on Ethereum is approaching ATH for the first time since 2021. Gas is 5-6 gwei today, compared to >300 gwei back then. Congrats all – we scaled the chain!”
Topping it off, Fundstrat’s Tom Lee viewed the network traction as a net positive for ETH’s value. He said,
“Ethereum usefulness rising = good $ETH”
Lee recently joined Bitcoin [BTC] mining firm, BitMine Immersion Technologies, to drive its ETH corporate treasury.
His bet? He believes stablecoins are the ‘ChatGPT’ of crypto, and the narrative would eventually boost ETH.
All the market buzz has been visible on-chain, too. Ethereum stablecoin market cap and weekly engagement reached a record level, too.
And speculators also jumped on the trend. In late June, ETH traders trimmed their long positions from 74% to 59%.
However, in July, they boosted long positions from 52% to 64% – A 12% jump in bullish conviction amongst top Binance traders.
Source: CoinGlass
Meanwhile, ETH faced rejection at $2.6K after jumping from $2.3k earlier in the week. The altcoin was valued at $2.52k at the time of writing.
That said, despite raging ETH treasury, the ETF demand has lagged behind spot BTC ETFs, noted analytics firm Ecoinmetrics.
Source: Ecoinmetrics/X
Since its debut, spot ETH ETFs have attracted over $4 billion in cumulative inflows. However, their BTC counterparts have raked in over $30 billion, nearly 7x more than ETH.
Per Ecoinmetrics, the divergence was due to a lack of a clear narrative for ETH.
“Every time Bitcoin flows accelerate, Ethereum reacts late and weak. That’s not about access. It’s about narrative: Bitcoin has a clear narrative, Ethereum doesn’t.”
ETH’s renewed market interest was visible on-chain as traders FOMO in. However, institutional demand still lagged behind BTC.