Forget High Gas Fee Challenges, Ethereum Remains Bullish: Time To Buy More?

Regardless of issues over community congestion and excessive gasoline charges, Ethereum stays bullish in the long run, in line with borovik.eth–a companion at Rollbit, who posted on X on December 26. The important thing elements driving the constructive outlook are pointing to Ethereum’s developer ecosystem, its position within the broader blockchain ecosystem, and the launch of quite a few Layer-2 options (L2s). 

Will Layer-2 Exercise Drive ETH To New Highs?

Borovik.eth remained deviant and optimistic about ETH, even with Solana (OSL) and different layer-1 cash like Cardano (ADA) hovering in 2023. Within the analyst’s view, Ethereum’s scaling challenges are manageable, believing that builders will discover methods of “resolving this concern completely over the long run.”

Based mostly on this optimism, the Rollbit companion believes that ETH will seemingly get better strongly within the coming classes contemplating the extent of improvement, particularly of layer-2 scaling choices meant for the pioneer good contract platform. In keeping with Borovik.eth, the event of layer-2 off-chain choices backed by huge firms, as an illustration, Coinbase, a crypto change, and enterprise capitalists (VCs), positions Ethereum (ETH) favorably for a bull run.

As of December 26, ETH stays in an uptrend however is cooling off after strong positive factors in This fall 2023. At spot charges, ETH is underperforming most layer-1 platforms like Injective Protocol (INJ) and Solana (SOL), whose costs rallied, reaching new 2023 highs. ETH costs are nonetheless trending beneath $2,400, a essential resistance stage. If bulls overcome this line, ETH might fly in the direction of $3,500 or higher within the months forward.

The spike in SOL’s valuation, particularly in H2 2023, has led to a comparability with ETH. Even so, most merchants are optimistic. Arthur Hayes not too long ago acknowledged that customers ought to start rotating funds from SOL to ETH, an endorsement of the second most precious coin by market cap.

Ethereum Layer-2s Handle Over $18.8 Billion

Whereas Ethereum faces challenges round on-chain scaling, builders have been working exhausting to resolve this challenge. The discharge of layer-2 off-chain choices utilizing rollups has been key on this drive. Most of those options, together with Arbitrum and Optimism, have been essential in assuaging strain from the mainnet, thus decreasing gasoline charges. In keeping with L2Beat, layer-2 protocols handle over $18 billion as complete worth locked (TVL). There are additionally 34 lively initiatives, with 23 extra being developed.

Among the many large firms hitching the layer-2 journey is Coinbase, the place by means of Base, customers can transact cheaply whereas counting on the Ethereum mainnet for safety. In keeping with Borovik.eth, over 60% of Base’s income is from rollup charges charged, highlighting the significance of their scaling resolution and the position Ethereum performs in all this. 

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The upcoming Dencun Improve set for integration subsequent 12 months will additional slash layer-2 charges. Builders plan to launch this replace within the Goerli check community as early as mid-January 2024.

Characteristic picture from Canva, chart from TradingView

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