© Reuters
Investing.com – In a note released on Monday, analysts at Bernstein pointed to several positive developments for , noting in particular that ETH has seen much healthier activity on the blockchain recently.
Bernstein notably hailed increased interest in non-fungible tokens (NFTs), in part thanks to the launch of a mini-game by Yuga Labs.
Daily fees on the blockchain have more than doubled since the start of the year, from around $2 million to $4 million-$6 million, according to the report.
Separately, Bernstein noted that Ether inflation has remained negative for more than two weeks.
“We believe that BTC [Bitcoin] and ETH remain relatively clean and we will see progressive positioning based on conviction,” the analysts wrote in their report.
They also reminded that the next big catalyst for Ethereum will be the Shanghai upgrade scheduled for mid-March, which will allow withdrawals of staked ETH.
Bernstein, however, also stressed that caution may prevail as this event approaches. Indeed, the prospect of staked ETH being released is cause for concern, given that 70% of staked ETH has been released through liquid staking pools such as LIDO or conducted by exchanges.
The risk is that investors who have staked ETH will rush to sell in droves once the Shanghai update allows them to withdraw their staked ETH (and the staking revenue collected).
However, Bernstein analysts believe it is unlikely to be short-term holders. As such, while weakness cannot be ruled out heading into the event, they believe this will lead to “greater conviction to hold in spot markets as fears abate.” .