Ethereum’s Activity Dips Post-Shanghai, JPMorgan Reports

Key Insights:

• Shanghai upgrade’s promise falters as Ethereum’s daily metrics and TVL decline.
• Despite the network activity slump, Ethereum staking sees a significant rise post-merge.
• ETF buzz grows, with the crypto community eagerly awaiting SEC’s October decision.

While the Shanghai upgrade was poised to propel Ethereum to new heights, recent data suggests a contrary trend. JPMorgan’s latest report delves into this unforeseen downturn.

Ethereum’s Unanticipated Setback

The crypto community was optimistic as Ethereum underwent the Shanghai upgrade, anticipating a boost in its efficiency and user base. Yet, JPMorgan’s findings paint a different picture. Ethereum’s daily transactions have receded by 12%. Furthermore, there’s a significant 20% reduction in daily active addresses. The 8% dip in the total value locked (TVL) is most concerning.

Earlier, Glassnode Alerts had highlighted a massive 99.99% drop in Ethereum’s gas consumption post the Merge. This dramatic fall is mirrored in the plummeting gas fees on the network. JPMorgan’s study posits that the waning daily activities might be a key factor behind this dwindling gas demand.

Yet, it’s not all bleak for Ethereum. Since the Merge, staking activities have shown a silver lining, with a marked uptick and subsequent unlocking of staked ETH. Nikolaos Panigirtzoglou, a seasoned analyst at JPMorgan, weighed in on this. He remarked that the transition from Proof-of-Work to Proof-of-Stake has curtailed the network’s energy consumption by a staggering 99%. This has led to a contraction in Ethereum’s supply and a surge in staking—however, the rise in network activity that many anticipated still needs to be discovered.

Market Fluctuations and the ETF Landscape’s Evolution

Ethereum’s market stance has also seen shifts. Ethereum traded at $1,590 at press time, indicating a 0.15% dip in the past 24 hours. In the broader crypto landscape, while other altcoins registered minor drops, Bitcoin’s price descended below $26,600. Bitcoin’s market capitalization currently hovers at $519 billion, comprising 49.2% of the cryptocurrency market’s total value.

The crypto sphere is rife with discussions on ETH futures exchange-traded funds (ETF) and spot Bitcoin ETF applications. These filings are perceived as potential gateways to broader cryptocurrency assimilation. Pioneers in this realm include ARK 21Shares, Volatility Shares, Roundhill, Bitwise, ProShares, and, notably, Grayscale.

Grayscale recently ventured into the ETF arena. On September 19, they presented an application for a novel ETF product, the Grayscale Ethereum Futures Trust ETF, to the U.S. Securities and Exchange Commission (SEC).

Before Grayscale’s move, Valkyrie had already initiated an Ethereum futures ETF proposal with the SEC in mid-August. Speculations are rife that the SEC might soon sanction the inaugural futures Ether ETFs.

The clamor for a Bitcoin ETF is palpable, with numerous entities eager to roll one out. The SEC is meticulously scrutinizing Ethereum ETF applications from ARK Invest and VanEck. Per the SEC’s guidelines, the public has a 45-day window to voice their opinions on these applications. The collaborative ARK 21Shares Ethereum ETF aims to emulate Ethereum’s price trajectory using the CME CF Ether-Dollar Reference Rate.

Yet, being under review doesn’t assure a green light. Ethereum futures ETFs remain in the SEC’s evaluation queue, with potential green lights speculated for October.

Ethereum’s trajectory post-Shanghai veered off the expected path. Still, the unfolding ETF scenario and market dynamics suggest a multifaceted future for the cryptocurrency world.