Layer 2 growth is an optimistic indication for $ETH holders, but the major question is how much of the value stays with ETH and flows into L2 tokens such as $MATIC, $ARB, and $OP.
๐น Reasons to hold $ETH
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Ethereum continues to safeguard the network as L2s settle transactions on it, making it important.
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Is there an upcoming ETH ETF? - If authorized, demand might increase significantly.
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Deflationary ETH: With EIP-1559 and staking, the supply of ETH is decreasing over time.
Reasons to Diversify:
โ ๏ธ Some L2 tokens may beat ETH in the short run owing to direct adoption.
Competition from Solana, Avalanche, and other chains may challenge ETH's supremacy.
โ ๏ธ Regulation risks: SEC attention on Ethereum may impact price action.
๐ If you believe in Ethereum's long-term prospects, it $ETH is a great investment. However, if you desire a greater risk/reward ratio, allocating some to L2s such as $ARB, $MATIC, and $OP might be a wise move.
What is your strategy? Diamond hands or seeking for rotation? ๐๐ฅ
#holdETH