Ethereum's resurgence and layer 2 boom define crypto's second quarter – IntoTheBlock

The second quarter in crypto was marked by a downward trend in bitcoin (btc) and ethereum (eth), btc miners sold their reserves at a rapid pace and Layer 2 blockchain activity quadrupled, according to IntoTheBlock’s “On-chain Insights” newsletter.

bitcoin price fell by 12.8% following its fourth halving on April 20, with an expected price surge caused by a supply shock failing to materialize. Analysts at IntoTheBlock shared that this is likely due to long-term holders taking profits in 2024.

Furthermore, miners have sold over 30,000 btc in June alone, which is equivalent to almost $2 billion. Again, the halving could be linked to this move, as miners' profit margins have decreased since then.

In contrast, ethereum saw a modest 3.1% drop, a feat made possible by the approval of eth spot exchange-traded funds in the US, analysts highlighted. This event boosted the price of ethereum by over 10% as such investment products are expected to attract substantial investment, mirroring the inflows seen with bitcoin ETFs.

Additionally, the ethereum landscape was noticeably different, with an increase in transactions on layer 2 blockchains such as Arbitrum, Base, and Optimism, following the integration of EIP-4844.

This development introduced “blobs,” which significantly reduced transaction fees for Layer 2 blockchains and encouraged greater activity within the chain. Therefore, this potentially set the stage for long-term network benefits despite a short-term decline in fare revenues.