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Ethereum Price Preview: June 29 – July 5

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Ethereum is undergoing major changes and the last week has been exceptionally busy.

So what’s been driving the hype and what events should we be watching in the coming week?

Daily Transactions on Ethereum Continue Surge

Last week, daily transactions rose above 1 million for 5 consecutive days. The last time this level of activity was achieved was at the height of the crypto bull run in January 2018. This time around however, the price of ETH has remained uncorrelated with daily transaction volume.

This surge in Ethereum transaction activity can largely be attributed to the migration of the Tether stablecoin to Ethereum as well as the recent growth in decentralized finance transactions.

Yield Farming Explosion Could Signal a Bubble in DeFi

The practice of “yield farming” – earning rewards for using decentralized finance apps on Ethereum – is on the rise. Hundreds of millions of dollars have entered the space in the last month alone, marking a major milestone in the industry.

Some DeFi users have achieved 100%+ annualized yields on their holdings, an incredible figure that excites some members of the community and concerns others. These massive and ultimately unsustainable gains are reminiscent of the ICO bubble of 2018.

Last week, Vitalik Buterin added his voice to a number of industry thought leaders concerned about the nature of the speculative DeFi boom.

Yield farming was marred yesterday after two modified ERC-20 tokens were exploited inside the Balancer Labs protocol to the tune of $500K.

ETH 2 Multi-Client Testnet to Go Live

Image from Ethereum.org

An Ethereum blog update has revealed that the first ETH 2 multi-client testnet is planned to go ahead on Monday June 29 with the launch of the Altona v0.12. While Ethereum co-founder Vitalik Buterin emphasised that the network is more for developers than general users, the milestone is undoubtedly good for sentiment among a community which has eagerly awaited the launch of ETH 2 following years of delays.

The multi-client testnet is the last major step in preparation for ETH 2. It is likely that the testnet will need to run for a number of months without issue before developers will consider Phase 0 ready for launch.

ETH Fees Dominate BTC in New Era for Decentralized Blockchains

Ethereum continues to tear away from Bitcoin as the chain with the most demand for block space, perhaps signalling the beginning of a new paradigm in the ecosystem – one where the majority of financial settlement in this space is done on Ethereum.

This shift may be cemented by another trend that is being observed across Bitcoin-Ethereum bridges, with over 11,100 BTC (~$100M at the time of publication) now existing on Ethereum. Much of this new BTCe is being used in decentralized finance, allowing users to earn minute-by-minute interest on their BTC holdings.

PlusToken Scam Moves $188 Million ETH

PlusToken, one of the largest Ponzi schemes to operate in crypto, moved 790,000 ETH worth $188 last week. These holdings have since been split across numerous addresses.

While this isn’t necessarily an indicator for the price of ETH, should these funds be liquidated at an exchange, the sale would put significant downward pressure on Ether’s price. The move also coincided with a sharp dip in ETH on June 24th from a high of $249.60 to $232.01 on the same day.

Media Roundup

In industry events, the Berlin Token Engineering meetup is going ahead online today, June 29, with multiple speakers sharing resources on blockchain token development.

The Ethereum Swarm team are hosting an event on the same day, featuring talks from Swarm CEO Terry Culver.

One of the more publicised “Ethereum Killers”, Dfinity, is hosting their Tungsten launch event on Tuesday June 30.

The Maker Foundation are also hosting a panel on July 3rd to discuss the potential of DeFi in India and Malaysia.

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Conor Maloney
Conor Maloney Analyst