Ethereum’s chain is seeing more transactions than ever, but that doesn’t mean the coin’s price is going to climb higher than ever. In January, daily transaction counts rose to a fresh record of 2,885,524, illustrating the scale of on-chain activity. The bullish case is that Ethereum will still behave like the primary settlement layer that other crypto apps, especially decentralized finance (DeFi) apps, are built on; as the network grows more efficient, it will (theoretically) end up capturing a larger share of the capital flows that would otherwise go to its L2s.
The less bullish case is that if users spend most of their time on the rollups, the base chain might not see the kind of fee pressure that used to translate into stronger value capture and better returns for holders. Ethereum is still one of the few cryptocurrencies that’s in such wide usage that it’s effectively crypto infrastructure. That makes it indispensable in the crypto sector, and also one of the core investments that you should own if you’re building a crypto portfolio.
If you don’t own any crypto yet, $1,000 is a properly sized first step to take with this asset. It’s a big enough commitment to matter for a portfolio’s performance, but not so big that it will wreck your plans if Ethereum has one of its periodic gut-check drawdowns, which is likely something that’s happening right now. If you decide to buy it, be ready to hold it for a few years; if that horizon sounds problematic to you, it’s best to invest elsewhere. Finally, don’t confuse the chain reporting record activity with a guarantee of higher prices next month. Usage is indeed something that can stimulate higher prices in the long run. But in the short term, it’s just one factor of many, and it’s often washed out amid the noise of other bullish and bearish drivers — and there are plenty of the latter in play right now.
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