Last week, we listed the developments in the Ethereum network while pointing out that the path to an immediate price rally is unclear. This week, amid slightly lower prices, we’ll expand on that viewpoint with more progress updates and price information.
Ongoing Liquidations Sink Prices
Bitcoin price has slipped further, dragging Ethereum and other cryptocurrencies along with it. As is often the case, overleveraged bets caused mass liquidations contributing to downward selling pressure and, in turn, more liquidations.
After hitting a record $4,383 in May, ETH is now trading at $2,592. The DeFi and derivatives markets have helped provide the infrastructure for these liquidations, with complex markets forming around fundamental assets (such as Ethereum) being traded.
DeFi Growth Continues
The DeFi ecosystem accounted for around 40% of ETH moved on the network in April, according to Chainalysis, a 7% increase from the previous 12 months.
With more money pouring into DeFi, the ecosystem is more attractive to potential hackers, with cyberattacks rising significantly this year. While $120 million was stolen from DeFi protocols in 2020 according to Block Research, $411 million has already been stolen this year.
The total value locked (TVL) in DeFi now stands at $59.34 billion compared to under $1 billion last year.
Aave has flipped Maker to become the #1 protocol by TVL, with 15% dominance. Aave now holds $12.52 billion in TVL compared to $8.5 billion for Maker.
Adoption and Progress
Google has changed its tune on the ban on crypto ads, with reports now emerging that such ads will be permitted later this year. Advertising crypto to U.S. users on the world’s largest internet search engine could have a major impact on sentiment and price.
1% of the Bitcoin supply now lives on the Ethereum network as WBTC as demand for wrapped Bitcoin continues.
Uniswap V3 has now deployed on the Arbitrum mainnet, giving DeFi users more options when it comes to decentralized swapping and trading of cryptocurrencies.
“Arbitrum is currently in whitelist only mode,” says Uniswap Labs, adding that “once it opens to all users, Uniswap v3 will work out of the gate with no additional work required.”
The FTX exchange has paid $210 million to change the name of a popular esports team, TSM, to TSM FTX.
This is one of the largest transactions in esports history, and while it sounds extravagant, the brand awareness for FTX in a relevant industry could be huge.
Cryptocurrency and digital assets have a huge use case in gaming for minting and trading in-game assets, and the esports industry is booming. The esports industry is worth over $1 billion as of 2021, meaning the FTX deal makes up a huge chunk of the estimated value.
While it’s difficult to say whether the deal will be worthwhile in the end, the sheer scale of the transaction will be sure to make headlines throughout the esports industry and make the FTX crypto exchange a household name among gamers.
Ethereum Still Tapped to Outshine Bitcoin
A recent Forbes article states that “Ethereum’s 10-day average trading volume has doubled toward 80% of bitcoin’s from the start of 2021, according to McGlone, citing CoinMarketCap data.”
The article makes the case for Ethereum to overtake Bitcoin’s market cap, echoing sentiments found in the recently leaked Goldman Sachs report citing a high likelyhood for ETH to become the dominant cryptocurrency.
While Bitcoin managed to quadruple its value in the last twelve months, Ethereum saw a 10x increase in the same time frame, closing the gap between both currencies and drawing the “flippening” ever closer.
Bloomberg analyst Mike McGlone stated that “Emphasizing the benefits of diversification, notably in an asset class as nascent as cryptos, the trend that appears enduring is ethereum gaining market share versus Bitcoin.”
With major inflows from institutional investors into the Grayscale Ethereum Trust this week, it seems that Ethereum is consolidating even as price inches lower. The 1000% growth seen in the last year made a significant correction likely and even necessary for healthy, sustainable growth to continue, and it remains to be seen whether ETH will now muster for a rally.
In our last piece, we discussed the likelihood that a rally will not occur in the near-term, with more price consolidation and volatility ahead for the time being, and this view still stands for now as ETH finds new footholds of support and resistance.
The CryptoConnection conference is being held from June 08 – 09 with special keynote speakers including billionaire investors Mark Cuban and Mike Novogratz.
Citing “a sea change in our understanding and perceived value of cryptocurrency,” the event will focus on the mainstream direction in which cryptocurrency is headed and what that means for investors.
Meanwhile, the PI x DEFI: Investing in Crypto and Decentralized Finance webinar will be held online on June 10, featuring speakers from various crypto institutions including BIGG Digital Assets, Voyager Digital, DeFi Ventures, Ether Capital, and many more.
“Our goal is to provide investment ideas that help to mitigate the price risk of the underlying cryptocurrencies,” states the event page.