Ethereum Dencun Upgrade Drives Network Activity, Yet JPMorgan Analyst Warns of Sustainability

The recent implementation of the Ethereum Dencun upgrade has triggered a significant surge in on-chain activity, primarily driven by reduced transaction fees for Layer 2 scaling solutions. This cost efficiency has led to increased usage and a notable rise in daily transactions on the Ethereum network. However, analysts at JPMorgan, led by Nikolaos Panigirtzoglou, express skepticism regarding the longevity of this growth spike. In a client note, they highlighted that while the upgrade is positive, the boost in activity may not be sustainable in the long term, as it largely reflects pent-up demand rather than signaling a fundamental, lasting increase in user adoption or new applications. The market is now closely watching whether the reduced fees can foster genuine ecosystem expansion or if the current activity represents a temporary peak.