Ethereum continues consolidating as Q1 results show massive growth for the largest altcoin

• Ethereum's network Q1 financial report shows that it tripled its earnings quarter-on-quarter to around $370 million.
• Bitcoiner argues about ETH's security status as Bloomberg analyst James Seyffart labels it as a commodity.
• VanEck expects Ethereum Layer 2 chains to accrue more revenue than the main Ethereum chain by 2030.

Ethereum (ETH) sustained its consolidating movement for the second day on Thursday, trading above $3,300 after crashing earlier in the week. While this may signify indecisiveness among bulls and bears, its Q1 results show steady growth across various sectors even as community members debate on its commodity status.

Read more: Ethereum drops further as Bitcoin’s decline, uncertainty over ETF weigh

Daily digest market movers: L2s, Q1 earnings, ETH commodity status

Ethereum has been one of the most trending cryptocurrencies in the past few weeks. Despite expectations that anticipation for Bitcoin's halving would be the main subject of discussion, the SEC's decision on Ethereum ETFs and the recent crackdown on Ethereum Foundation appears to have taken center stage in the crypto community. That said, here's a quick breakdown of the latest happenings surrounding the largest altcoin:

• In a report released on Wednesday, global asset manager VanEck analysts expect Ethereum Layer 2 networks to accrue more revenue than its main chain. They sighted data from crypto analysis firm Artemis XYZ, showing the increasing growth of the underlying Ethereum ecosystem against its Mainnet declining market share. L2s offer superior throughput and user experience, especially with the Dencun upgrade on March 13, which introduced Blob space – a data layer for L2 that reduces data overhead and gas fees – noted VanEck analysts.
• The analysts further predicted that Ethereum L2s may be worth more than $1 trillion by 2030, considering several application, sector, or function-specific Layer 2s may emerge – like an asset management L2 or rollups that host a social media sector. They noted that these L2s reinforce "the value of ETH as the true ‘oil’ powering the entire ecosystem of connected chains.”
• Ethereum's Q1 financial report, released on Wednesday by Coin98 Analytics, showed significant growth in revenue and earnings. Ethereum's revenue grew nearly 84.6% quarter-on-quarter (QoQ) to reach $1.035 billion, and earnings reached $369.11 million, a 198.8% QoQ change. Much of this increase is attributed to the spike in gas fees before the Dencun upgrade. Other metrics from the report include 107 million transactions conducted with 9.7 million new addresses in Q1.
• Following ETH Q1 results was Cory Klippsten, CEO of Bitcoin financial service firm Swan.com, arguing in an X post on Wednesday that Ethereum was a security when it launched. He claimed the SEC didn't want to get in the way of another agency when it allowed the CME to start trading ETH  futures ETF.
  However, Bloomberg analyst James Seyffart, who was tagged in the post, responded by stating that the ETH futures ETF was registered as "commodities futures, not securities futures."

• James Seyffart also said in another X post that the SEC asking for public comments on spot Ethereum ETF filings is a normal procedure and "not ‘bullish’ in any capacity for Ethereum ETFs."

Also read: Ethereum drops further as Bitcoin’s decline, uncertainty over ETF weigh

Technical analysis: Indecisiveness persists 

Traders are exercising more caution as Ethereum's price continues its horizontal move for a second consecutive day. This indicates reduced bullish sentiments for the largest altcoin.

ETH/USDT 1-hour chart

Read more: Ethereum consolidates above $3,500 as Bitwise CIO says ETF delay would be positive

If Bitcoin’s price shows signs of recovery, ETH could resume an upward move to break past the $3,493 level, which is the high from April 2. . Further up, next resistances are at $3,517, $3,570, and $3,655, which also align with recent swing highs seen in the past few days.

However, this thesis would be invalidated if ETH moves below the $3,204 support level, the low from April 2.

The SEC's decision on the May 23 deadline to respond to VanEck spot Ethereum ETF filings is expected to have a major effect on prices.

 

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