Why ARB's 90% Rally Hinges on Solving a $0.51 Paradox

Arbitrum’s native token, ARB, is drawing renewed attention after recent developments, including PayPal’s inclusion of the network as a supported chain for its PayPal USD (PYUSD) stablecoin. The move has triggered a 10% price rally in early July and a subsequent 6% hourly increase as of late August 2025, outpacing average gains in the Layer 2 sector. Despite this, the ARB price still remains at $0.51, or 79% below its all-time high of $2.40 recorded in January 2024 [3].

Analysts highlight key developments that may drive ARB’s potential for a 90% rally. Among these is Arbitrum’s recent technical upgrades, including the Timeboost initiative, designed to accelerate transaction speeds and reduce network latency. Additionally, the Arbitrum DAO has committed $14 million in ARB tokens to subsidize security audits for projects on the network, signaling a focus on long-term sustainability and developer support [3].

Further, the broader Ethereum Layer 2 landscape is evolving amid declining costs due to Ethereum’s Dencun upgrade. This has increased user activity on layer-2 solutions and boosted Arbitrum’s total value locked (TVL) to $3.39 billion in mid-August 2025, a year-to-date high. The surge in TVL coincided with a 12% rise in ARB’s price, supported by strong trading volumes and positive technical indicators like a bullish MACD [1].

However, analysts caution that ARB faces structural headwinds. The token currently trades at a 79% discount to its peak and faces competition from rivals like Optimism and Solana, both of which have seen significant adoption despite recent setbacks, such as Solana’s network outage. Moreover, the launch of Circle’s native USDC on Hyperliquid has introduced a potential liquidity shift, according to a Messari analyst, which could challenge Arbitrum’s dominance in the stablecoin arena [2].

Despite these challenges, Arbitrum’s recent partnerships and protocol innovations have positioned it as a strong contender in the Layer 2 ecosystem. The platform’s integration into PayPal’s growing stablecoin infrastructure is particularly significant, as it broadens ARB’s utility beyond speculative trading and into mainstream financial services. This, in turn, could attract institutional capital and foster a more stable, long-term price trajectory [3].

Looking ahead, market participants are closely monitoring the impact of token unlocks and regulatory developments. A $851 million worth of token unlocks across Arbitrum, Aptos, and Avalanche in early August 2025 could introduce short-term volatility, but long-term fundamentals remain intact. If Arbitrum continues to execute on its roadmap, including expanding DeFi offerings and enhancing interoperability, the stage may be set for a sustained rally in the coming months [2].

Source:

[1] title1 (https://coincodex.com/crypto/arbitrum/)

[2] title2 (https://www.coinbase.com/price/arbitrum)