Grayscale Ethereum Trust Ends Outflows as Ethereum Layer 2 Activity Surges

The recent surge in Ethereum network activity signals renewed investor interest, offering hope for Ether’s long-term price appreciation.

The Grayscale Ethereum Trust (ETHE) saw its first day without net outflows on August 12, 2024, following its conversion to a spot ETF on July 23. This event coincided with a notable increase in on-chain activity across the Ethereum ecosystem, suggesting a potential shift for the struggling fund.

Since its inception, ETHE has faced considerable challenges, losing nearly $2.3 billion in Ether — over 25% of its original $9 billion in holdings. In contrast, Grayscale’s Bitcoin Trust (GBTC) took almost four months to reach a similar milestone without outflows.

The halt in ETHE outflows aligns with a marked rise in activity on the Ethereum network and its layer 2 solutions, indicating a possible resurgence of investor confidence in the Ethereum ecosystem.

Ethereum DEXs Surge with Layer 2 Growth

Data from DefiLlama indicates a positive trend in decentralized exchange (DEX) trading volumes on Ethereum and its layer 2 networks, such as Base. Over the past 24 hours, these networks have seen an increase of 12% and 11% respectively. In contrast, trading volumes on Solana-based DEXs have experienced a 10% decline during the same period.

The growth extends beyond DEXes. Uniswap, a leading Ethereum-based DEX, saw a record number of new monthly addresses created on layer-2 networks in July. Dune Analytics data reveals a staggering 8.65 million new addresses, nearly double the 4.93 million added in June.

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