In recent observations by IntoTheBlock, Ethereum, the prominent smart contract platform, reveals indicators of expansion despite its price challenges and unclear regulatory status.

According to the head of research at IntoTheBlock, Ethereum is witnessing heightened activity levels, reaching volumes not seen in years, which suggests growth.

While Ethereum has faced criticism for its price performance and competition from platforms like Solana, it has recently experienced increased transaction volumes on its mainnet, surpassing levels seen since May 2022. Additionally, the adoption of layer-2 scaling solutions has exceeded 10 million ETH for the first time.

Activity on layer-2 platforms such as Arbitrum, Optimism, and Base is reported to be more than double that of Ethereum's mainnet. Moreover, the recent significant drop in transaction fees following the Dencun update on March 13th is expected to further boost activity on layer-2 blockchains.

However, it's worth noting that Ethereum has lagged behind Bitcoin and the S&P 500 in terms of price performance in this cycle.

Regulatory uncertainty adds another layer of complexity to Ethereum's landscape. Gary Gensler, Chairman of the U.S. Securities and Exchange Commission, refrained from categorizing Ethereum as either a security or a commodity, contributing to the ongoing ambiguity. The SEC is still deliberating on several proposals for Ethereum-based exchange-traded funds (ETFs), adding to the uncertainty surrounding the asset's regulatory status.

At the time of writing, Ethereum is trading at $3,333, marking a 3.75% decrease in the past 24 hours. Despite price fluctuations and regulatory challenges, Ethereum's network activity signals a trajectory of growth amidst the evolving crypto landscape.