The reasons to invest in Ethereum strengthened

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Key facts:
  • The consequences of Dencun will not be immediate for the Ethereum network.

  • The price of ETH has not yet seen any significant movements related to Dencun.

According to the investment and asset management company, Hashdex, the update that the Ethereum network experienced yesterday gives more reasons to invest in ether (ETH).

Dencun, name of the protocol update, arrived with the promise of reduce the commissions paid for making transactions in Ethereum and its second layers.

This news is especially relevant considering the notoriously high fees that have characterized the Ethereum main chainespecially in times of network congestion.

The update is based on two key concepts: blobs and temporary data storage.

On the one hand, the ability to generate blobs (“masses” or “blobs”), a mechanism for organizing data in the blocks that optimizes the use of space in each of them. Likewise, the ability to save off-chain data (outside Ethereum’s accounting) that is always available to the nodes contributes to this optimization, as CriptoNoticias explained.

For Hashdex in its most recent report, the importance of a new feature called Proto-Dankshardingaimed at improving Ethereum rollups.

The activation of the Dencun update marks an “important milestone in the latest evolution of Ethereum,” as noted by Hashdex. Although the benefits of this update may not be immediate, This improvement is essential to establish a technological framework that allows Ethereum to attract millions of new users and applications.

“For investors this not only indicates improved usability and accessibility, but also reinforces Ethereum’s positioning as a leading platform for innovation and ETH’s long-term investment thesis as becoming increasingly stronger.”

Hashdex, investment and asset management company.

Despite this, ETH price has not yet seen significant movements related to Dencun. In fact, the price of the cryptocurrency has decreased 3% in the last 24 hours, falling from $4,000 to $3,847, as shown in the TradingView chart.

From the point of view of market analyst Mike Fay, digital assets in 2024 will continue to be driven by “hype and, in some cases, scams.” However, Fay believes that there are valuable assets in this space and that Proper capital allocation in these assets can generate great returns.

In this sense, ETH, Ethereum cryptocurrency, network created by Vitalik Buterin, stands out as one of the best long-term betssays Fay.

Despite the risks and volatility inherent in the world of cryptocurrencies, Ethereum remains the largest decentralized financial ecosystem in the digital asset spaceaccording to the analyst’s opinion.

However, the biggest risk remains regulatory uncertainty, especially when it comes to ETH classification. The United States Securities and Exchange Commission (SEC) continues to value any cryptocurrency other than bitcoin as a security (value title).

In addition to this, there is still a long way to go “from cheap transactions to mass adoption of traditional finance on the network.” In this panorama, ETH continues to be an attractive option for investors who are looking for long-term opportunities in the cryptocurrency market.

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