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Ethereum Price Preview: May 10 – 16

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Last week, we discussed new all-time highs in price along with global milestones and upcoming network updates. This week, we’ll take a look at how all of these factors impacted price and sentiment, along with other factors at play in today’s crypto markets.

ETH Price and Sentiment

Eth2 deposits have risen steadily in recent months, a result of staking programs from projects like Coinbase and Bitstamp.

Source: Ethereumprice.org

Staking has likely played a role in Ethereum’s upward price momentum lately, reducing the true circulating supply of ETH and making the asset scarcer in the open market.

Ethereum price is now up almost 100% since this time last month, with a 30% increase in the last 7 days alone. ETH is now trading at $4,148 after making yet another all-time high earlier today, trading above $4,150.


The main obstacles for Ethereum have been scaling and network operating costs. With solutions for both of these problems well underway, the market is heating up as more people begin to see the potential of a network that hosts the vast majority of DeFi projects, with the DeFi industry now holding $86 billion and counting.

Source: DeFi Pulse

Maker is in the lead with a TVL of $15.16 billion, followed by Compound at $11.55 billion. Maker dominance in the DeFi industry is now above 17%.

As mainstream adoption of cryptocurrency and blockchain technology rises by unprecedented levels, the potential for Ethereum has many investors getting on board.

Ethereum as a Google search term closed in on Bitcoin’s position last week, a strong indicator of positive sentiment for and interest in ETH.

Source: Twitter

A full Eth2 migration is expected to take place some time next year, meaning Ethereum is tentatively on track to operate with an environmentally friendly Proof of Stake consensus method that comes with lower fees and increased transaction throughput, positioning Ethereum to fulfill the founders’ vision of the network becoming a “world computer.”

Uniswap

Uniswap V3 is now live on the Ethereum mainnet as scheduled, with the next stop being the Optimism L2 implementation.

V3 of Uniswap promises radically more capital efficiency for liquidity providers and a slight reduction to gas fees. The Optimism implementation should make fees significantly cheaper, finally solving the issue of punitively costly DeFi transactions squeezing out retail.

Ironically, it’s possible that Uniswap’s new capital efficiency will favor whales and venture capitalists only, causing a race to the bottom for would-be liquidity providers that once again leaves retail investors and traders drawing the short straw.

While low-fee Uniswap has yet to be implemented on L2 Ethereum, that hasn’t stopped traders from jumping on board.

Uniswap fees exceeded those of the Bitcoin network last week, outdone only by fees on the Ethereum network itself. 

The exchange’s new interface drew some criticism on social media for its complexity, with multiple users stating that pricing one’s liquidity position is more complicated to understand than on the old version.

Regulatory Issues

New York state senators are considering a bill that would authorize a three-year delay on the activities of any crypto mining projects in the state. 

New York Senate Bill 6486 was introduced last Monday in an effort to help New York meet its target emission levels as outlined in the Climate Leadership and Community Protection Act of 2019.

Should the bill pass, the state would carry out an investigation into cryptocurrency mining operations and assess their impact on the environment in terms of impact on wildlife, air, water, and greenhouse gas emissions. A 120-day period would then pass for public comment and a public hearing on the matter.

The Greenridge Generation plant in New York, which averaged at 5.5 bitcoins per day last year, would almost certainly be affected in the event of the bill passing.

Meanwhile, a dispute between German financial regulator BaFin and the Binance crypto exchange deepened last week.

BaFin rejected a request from Binance to remove a warning imposed on the Binance site advising users that they may be in breach of securities laws by purchasing stock tokens such as the tokenized version of Tesla stock available on Bianance.

Media Roundup

The Digital Securities & Tokenization Summit takes place next week on May 19, featuring representatives from Coinbase, tZero, Aave, the Crypto Valley Association, and many more.

The event aims to teach attendees everything you need to know about what is happening in the world of tokenization,” stating that “you will hear from leading figures clearing the path for blockchain within the real estate sector, and you will gain new perspective on how established companies are renewing their business by introducing blockchain for tokenization.”

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Conor Maloney
Conor Maloney Analyst