Ethereum Struggles After Shanghai Upgrade as Bitcoin Spark Builds Momentum

In the cryptocurrency landscape, Ethereum’s performance has been lackluster since its Shanghai upgrade in April 2023, according to analysts from JPMorgan. The prominent financial institution expressed disappointment regarding Ethereum’s progression post-merger, highlighting a 12% decline in daily transaction counts and a 20% drop in daily active addresses. This underwhelming performance persists despite a significant reduction in Ethereum’s energy consumption following its transition to a proof-of-stake network a year ago, along with a decrease in the issuance of new ETH, which is typically seen as a bullish sign.

However, some experts in the industry caution against concentrating solely on Ethereum, as this may lead to an overly narrow viewpoint. Akash Mahendra, director of the Haven1 Foundation, noted that ignoring the swift growth of layer-2 networks built on Ethereum might distort the overall picture. These networks have taken on a considerable amount of transactions that would have otherwise occurred on the layer-1 blockchain, thereby enhancing scalability and easing congestion on the main network.

Despite these advancements, Ethereum’s transaction activity has been so weak recently that its supply curve has shifted back to being inflationary. Furthermore, Ethereum developers seem to be lagging in their timeline for the next major upgrade, named Dencun. Christine Kim from Galaxy remarked last week that if developers do not manage to launch the upgrade on a test network before Devconnect—an Ethereum-centric conference slated for mid-November in Istanbul—they are unlikely to implement Dencun this year.

In the interim, JPMorgan analysts have expressed considerable confidence in Bitcoin Spark (BTCS), which may indicate a transformative shift within the crypto ecosystem. BTCS adopts a unique Proof-of-Process (PoP) consensus mechanism that leverages users’ rented processing power for mining and transactions. This innovative approach enhances security and decentralization while addressing energy efficiency concerns often associated with Proof of Work protocols.

The Bitcoin Spark application is designed to streamline trading, storage, mining, and rewards distribution, positioning BTCS as a potential disruptor in the cryptocurrency space. The app moderates the influence of miners, particularly large mining operations, and reduces the risk of a “51% attack,” thereby bolstering network integrity. Following its network launch, Bitcoin Spark will welcome decentralized applications (dApps) and wallet applications, with its app serving as a wallet for both the Bitcoin Spark network and other EVM-compatible networks.

Currently in the sixth phase of its Initial Coin Offering (ICO), BTCS is selling tokens at an appealing price of $2.75, accompanied by an 8% bonus. This innovative project is reshaping the crypto landscape, offering potential returns of up to 393% to investors in phase six.

On the flip side, Ethereum’s resilience during market downturns, coupled with upcoming network enhancements, is expected to support its value in both the short and long term. Despite JPMorgan’s concerns about a sluggish upward trend, analysts remain hopeful about Ethereum’s potential to recover to its peak 2021 value and possibly reach new all-time highs during a market upswing. Currently, the estimated 24-hour price for ETH is $1,594, with projections suggesting it could surpass $2,000 by 2024.