In last week’s preview, we outlined the series leaps forward being made in the adoption of ETH and crypto in general. This week’s piece recaps the all-time high of $2,039.00 ETH recently hit as well as the many factors impacting price at the moment.
Ethereum Congested With Huge Demand
The Ethereum network is showing both its strengths and its weaknesses as the bull run continues and unprecedented demand for network usage sends gas fees soaring.
ETH hit an all-time high of $2,000 recently, and demand in DeFi has surpassed expectations.
The DeFi market TVL is at $41 billion with 16% Maker dominance. Maker now holds over $6.54 billion in total value locked with Aave behind it at $5.15 billion TVL.
ETH price has corrected from its ATH above $2,000 and is now finding some support at $1,700. The Bitcoin market cap recently surpassed $1 trillion, a huge milestone that makes Bitcoin the 6th most valuable asset in the world and shows the major growth of crypto in general.
Ethereum Faces Competition?
The heightened demand for Ethereum blockspace has clogged up the network, leading to high fees and gas prices. BNB coin soared 500% last week to become the #3 crypto in the space as users turned to Binance Smart Chain (a fork of Ethereum) looking for an alternative to high-fee Ethereum projects.
However, despite the stunning gains, BNB has a $40 billion market cap compared to $200 billion for Ethereum, leaving it with a very long way to go before it can come close to ETH. It’s interesting to note that the #3 project has been so successful purely due to the Ethereum network being so busy, signs that there is enormous additional demand for Ethereum if and when it is able to meet it.
While the high fees and competing chains are examples of issues that need to be fixed in the Ethereum network with upcoming scaling solutions, it’s encouraging to see that Ethereum is in such record demand. Interestingly, BSC runs an Ethereum Virtual Machine (EVM) and allows for a relatively low-friction transfer of assets from Ethereum to BSC. It is arguably BSC’s Ethereum-compatibility that allowed its chain to be successful. This could be a sign that the EVM will be the winning technology for all smart contract platforms – a huge boon for ETH.
The years of building the DeFi ecosystem largely on the Ethereum network are now paying off in dividends as ETH and various DeFi coin prices skyrocket due to their utility in a flourishing ecosystem. Bitwise launched a new DeFi index fund for accredited investors, with 10 blue chip DeFi tokens including YFI, COMP, and UNI.
In related news, Coinbase announced an ETH2 staking program waitlist last week.
Users will be able to stake ETH and earn up to 7.5% APR on their funds, and Coinbase has opened the list for aspiring users to join.
NFT Market Heats Up
The original creator of the popular Nyan Cat meme sold an NFT version of the meme for 300 ETH worth ~$600,000 last week. The meme comes from a video called Nyan Cat that was the 5th most watched video on YouTube in 2011.
The NFT is comprised of an ETH block hash containing an image of the Nyan Cat meme. It can be said to be “the” Nyan Cat now, having been immortalized on the blockchain and verified by its original creator, indicating one of the ways that memes will finally be able to be monetized.
NFTs have boomed in recent months, with unprecedented sales activity. An artist called beeple recently made history with his collection of NFTs, selling for a record-breaking $3.5 million.
Leading auction house Christie’s will now sell a beeple collection. Christie’s once sold Da Vinci’s Salvador di Mundi for $450 million, the highest ever price put on a single piece of art.
The beeple auction at Christie’s will mark the first time a piece of purely digital art will be sold at a major auction house.
Christie’s will start the bidding at $100 with no estimated final price or value due to the unprecedented nature of the sale. The auction house will accept ETH as payment along with fiat.
Last week, a mystery buyer opened a Larva Labs account and purchased $900,000 worth of rare Crypto Punk NFTs. Of the 19 images, all of them were originally claimed for free in 2017 before changing hands multiple times with increasingly higher valuations.
The fact that all of the pieces were claimable for free just a few years ago highlights the rapid transformation of the NFT space and the growing appetite in the market.
The Hello Decentralization conference is on from February 22 – 26, with speakers from projects including Raiden Network, Solidified, Golem, Web3 Foundation, and The Graph among others.
The conference is a “free online event and a meeting point for the community to talk and discuss decentralized technologies from a technical perspective.”
The Bloomberg Crypto Summit will be held on February 25, with speakers such as Circle’s Jeremy Allaire, Castle Island Venture’s Nick Castle, and Pantera Capital’s Joey Krug. The summit site page aims to answer the question “what will it take for digital assets to gain permanence in the asset allocations of institutional investors?