Crypto News– Despite a 50% increase in Ethereum staking since the upgrade, JP Morgan analysts have expressed their disappointment with the relatively lackluster surge in network activity.
JP Morgan Analysts Share Concerns Regarding Ethereum’s Post-Shanghai Upgrade Performance
Key performance indicators, including daily transaction volume, daily active addresses, and the total value locked (TVL) in decentralized finance (DeFi) protocols on the Ethereum network, have all seen declines, painting a subdued picture of the network’s health. All eyes are now turned toward the upcoming EIP-4844 upgrade, with the looming question of whether it will be a game-changer.
The decline in Ethereum activity is attributed by analysts to a convergence of what they call “bearish forces” that have dominated the past year. These factors encompass the collapses of FTX and Terra, regulatory uncertainties and crackdowns in the United States, diminishing institutional interest in the crypto space, and a slowdown in venture capital funding. It appears that these factors have outweighed the positive impact of the Shanghai upgrade, which allowed Ethereum validators to withdraw previously staked ether that was locked within the network.
Additionally, the Ethereum Layer 2 ecosystem has presented mixed results. While Optimism has experienced increased activity, Arbitrum’s performance has seen a decline. Intriguingly, the TVL on both Arbitrum and Optimism has decreased since the end of March, just before the implementation of the Shanghai upgrade.
These findings from JP Morgan shed light on the intricate dynamics shaping the Ethereum network and the broader crypto landscape. Despite optimistic upgrades and improvements, external market forces continue to wield significant influence over the network’s performance.
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