Before the upcoming Dencun Hard Fork, Ethereum Layer-2 tokens such as MATIC, IMX, OP, ARB, and MNT faced sharp corrections. Today, whales have been offloading their Ethereum Layer-2 token assets, driving prices down. However, Ethereum’s price is still hovering above $4,000. Bitcoin‘s price, on the other hand, set a new record today, reaching the $73,000 level just a while ago.
Debate Arises with Dencun Update
Tokens such as Polygon (MATIC), ImmutableX (IMX), Optimism (OP), Arbitrum (ARB), and Mantle (MNT) saw price drops between 3% to 5%. Ethereum’s focus on Layer-2 solutions to reduce transaction costs instead of scaling its main blockchain has met with criticism from crypto experts.
Justin Bons, Founder and CEO of CyberCapital, argues that Ethereum is now “entirely reliant on mediocrity.” In a recent tweet, Bons claimed that the layer-1 chain has zero plans to scale the main blockchain and is pushing users towards layer-2 chains instead.
Price Drops in L2 Tokens
One day before the Dencun update, L2 tokens experienced a sharp decline in prices. In the last 24 hours, altcoins such as MATIC, OP, and ARB saw a 4% drop in prices. Additionally, the cryptocurrency IMX showed a 5% decrease on Binance, while MNT caused approximately a 3% loss to its holders in the last day.
According to on-chain data, some large wallet investors known as whales in the crypto community are swapping their L2 tokens for stablecoins or other cryptocurrencies.
Spotonchain recently identified two large wallet investors who have been offloading their L2 token assets. Firstly, a wallet named DForcenet deposited 2.45 million ARB worth $5.05 million to the crypto exchange Binance. In a second transaction, a whale swapped 1.03 million ARB valued at $2.13 million for USDC. Both transactions took place on Tuesday. These developments likely contributed to the overall decline in L2 token prices.
The cryptocurrency Ethereum’s price reached its highest level of 2024 at $4,093 on Binance earlier today. However, since then, there has been a pullback, and it is currently trading at $4,028. While Bitcoin breaks records, it’s worth noting that Ethereum’s price has yet to surpass its own record of $4,868. Let’s see what direction the ETH price will take after the update.
