Welcome to the Ethereum Price Preview, an analysis of current and upcoming market events and how they might shape the price of ETH and the trajectory of the network.
As total value locked in DeFi crosses $7 billion, we take a look at the risks and fundamentals that may be impacting Ethereum price for the week ahead.
Bullish Indicators in the Market
ETH has broken above $400 once again with daily charts indicating a possible breakthrough to levels beyond $500.
Coins held by Bitcoin miners reached a two-year high on August 27, likely indicating that miners anticipate a price increase in the near-term. With Bitcoin’s market dominance currently at 59%, it’s possible that a price increase in BTC would carry over into the price of ETH as well. Although at this point, market action is being led – once again – by Ethereum.
Blockchain analytics group Whale Alert spotted a major transfer of 62,134 ETH, or approximately $26 million at the time of writing. Such activity is often associated with an increased demand for ETH in the short-term, and with the explosive growth and developments seen in the DeFi space recently, this should come as no surprise.
Industry-leading security provider, BitGo, may be building a sidechain for their wrapped BTC (wBTC) token as Ethereum transaction fees continue to climb, reaching a high of nearly 300 gwei last week. This follows significant progress made by Tether (USDT) to migrate their transactions to “layer 2” via the OMG Network.
The DeFi industry has continued to build strong momentum over the past week. The total value locked (TVL) now stands at nearly $8 billion – a level not yet seen before. Aave, the largest protocol in DeFi at the moment, reached an unprecedented regulatory milestone in the UK by achieving an Electronic Money Institution license from UK regulators. The license was granted in July but only caught mainstream attention last week.
Aave is now recognized as a licensed bank in the UK and over time, customers will be able to access DeFi services through their Aave bank account. This is a major breakthrough not just in the adoption of DeFi but for crypto in general and could well be taken as a bullish indicator by institutional investors.
In other DeFi news, USDC received a major update that allows it to send gasless transfers, helping to alleviate the Ethereum network and ideally tackling the issue of rising gas fees.
DeFi dashboard, Zapper, closed a seed round of $1.5 million last week after winning the Kyber DeFi hackathon last year and Fair Launch Capital made headlines for its hopes of making token launches more equitable.
There are now more than 5 million ETH locked in DeFi, an all-time high, with most of the locked capital distributed between the top six protocols. As more developments unfold from the industry, it’s likely that an increasing number of investors will begin to take notice and potentially introduce fresh money into the ecosystem.
This week we can also expect the yETH vault to open on yearn.finance. The vault will integrate with MakerDAO and is likely to provide double digit returns to those who deposit ETH in its smart contracts.
On August 25, Ethereum development and venture firm, ConsenSys, announced the acquisition of JP Morgan’s Quorum blockchain platform. Quorum is an open-source protocol layer aimed at blockchain integrations for major businesses and the platform has ties to Microsoft, the South African Reserve Bank and Covantis as well as JP Morgan. At JP Morgan, Quorum runs the Interbank Information Network, a payment network with over 300 banks and the platform will continue to perform this role after acquisition.
Last week, crypto derivatives platform, FTX, acquired Blockfolio, an industry-leading portfolio monitoring app, for $150 million. Blockfolio is the number one app in the crypto space with 6 million users. Blockfolio supports 10,000 assets and over 500 exchanges, allowing users to monitor the balance and activity of their portfolios as well as receive price updates.
The fact that the app received such a high valuation, as well as the fact that a one-year-old project like FTX was able to foot the bill, highlights the rapid growth and excitement seen in the crypto space recently. Both acquisitions received mainstream media attention.
Finally, the ETH 2 Medalla testnet is reportedly performing correctly with 76% participation, assuaging some doubts around performance following a bug earlier this month.
Ethereum Engineering Group’s Applications of Blockchain for Business will take place on September 02 with several dozen attendants on the register. The event will discuss topics such as cryptography, blockchain technology, supply chains, land ownership on the blockchain, and more, and is open to attendants of all levels of knowledge.
Ethereum Malaysia will host an event on September 04 called AMMs, vAMMs & Liquidity Mining with Perpetual Protocol. The event will deal with topics like Automated Market Makers such as Uniswap as well as liquidity mining and yield farming, and features guest speaker Yenwen Feng, co-founder and CEO of Perpetual Protocol.