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$ETH Ethereum pivots from retail trading to institutional settlement hub, Bitwise says
Bitwise data shows Ethereum now handles more institutional stablecoin flows than retail retail trades.
Ethereum eth3.45%Ethereum isnât just for non-fungible tokens or and decentralized finance degens anymore. According to a new analysis from Bitwise Europe, the networkâs base layer is quietly transforming into a heavyweight settlement system for institutional money â while retail activity shifts elsewhere.
The data reveals that Ethereum is âevolving from a retail toll road to a freight terminal for institutional-grade use casesâ as stablecoin transactions now account for the majority of on-chain activity. With more than $127 billion in stablecoins circulating on Ethereumâs blockchain, the trend suggests institutions are increasingly using the network âfor institutional treasury flows and on-chain dollars,â the analysts say.
Meanwhile, the DeFi frenzy and NFT mania that once characterized Ethereum have largely migrated to layer-2 solutions.
With upgrades like Pectra already live and PeerDAS/Fusaka coming soon, Ethereum is âno longer scaling for smaller protocols,â the analysts write, adding that the network is now aiming billions of layer-2 transactions, tokenized treasuries, and institutional settlement flows.
The evolution of Ethereumâs mainnet role has been foreseen by its developers for some time. In early 2024, Ethereum core developer Eric Conner suggested that the networkâs mainnet in the long term wonât serve as the platform where daily users would want to transact tokens.
Addressing the prevalent concern about high transaction fees on Ethereum, Conner pointed out that while Ethereumâs mainnet may not be the ideal platform for daily transactions in the long term, it will still serve as the foundation for decentralized applications and settlement layers.
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