Last week, we covered the market dip as well as our reasons for why the price correction was likely temporary. This week, we’re taking a look at ETH’s explosive new all-time highs and the fundamental factors underlying price action.
All-Time Highs as Progress Continues
Ethereum is now trading at $3,139. Ethereum co-founder Vitalik Buterin is now the world’s youngest known crypto billionaire at age 27 and with 333,520 ETH in his publicly disclosed holdings.
“Surging DeFi volumes continue to push ethereum prices higher as investors gain confidence in crypto and see ethereum as a safe second-place asset,” said Jehan Chu of Hong Kong VC firm Kenetic Capital.
Andreesen Horowitz recently announced plans to launch a $1 billion crypto VC firm to develop and innovate in the blockchain and cryptocurrency industries, a strong vote of confidence in the health of the ecosystem.
DeFi’s total value locked (TVL) now stands at $76 billion, an all-time high.
Maker is dominant with $11.46 billion in TVL, closely followed by Aave at $11.05 billion.
“The Merge” Draws Closer After Dev Net Success
Ethereum fundamentals continued to improve with the Eth2 merger dev net launch marked a success on May 01.
“The testnet is in quite an unstable state right now, and more a tool for devs to debug clients today. We’ll run more user-centric testnets in the coming weeks, once things stabilize enough,” said Eth2 dev Diederik Loerakker.
The dev net is the first full Proof of Stake (PoS) communication between different ethereum clients, tentatively demonstrating that PoS consensus is indeed feasible on the wider network.
Prototyped in 2019, the actual merger could be implemented as early as December 01 of this year. Miners will no longer receive the 13,000 or so ETH per day that they gain in mining fees once the merger is complete, meaning PoS consensus will reduce the supply by 13,000 ETH or over $40 million in today’s prices.
Coupled with the EIP1599 burning fees, Ethereum is set to become increasingly deflationary as time goes on.
ETH has already quadrupled its price this year alone.
Major Global Milestones
The European Investment Bank (EIB), the main lending arm of the European Union, will be issuing 2-year bonds worth 100 million euros through Goldman, Santander, and Societé banks. However, the bonds will be “registered in the Ethereum blockchain network, using distributed ledger technology,” a groundbreaking milestone for the mainstream application of Ethereum in global finance.
Meanwhile, the Maker community has voted to create a eurDAI stablecoin pegged to the value of the euro, potentially bridging a major gap in DeFi that excludes EU users not wishing to be exposed to US dollar volatility.
Boston Blockchain Week 2021 will be held from May 03 – May 06, focusing on NFTs and blockchain in media. Keynote speakers include Circle’s Jeremy Allaire, Algorand CEO Steve Kokinos, and Rarible CEO Alexei Falin. The event will also take a close look at DeFi and institutional adoption.
Bar on the Block is hosting a webinar on May 06 with speakers from the Pantera Capital and Multicoin Capital VC firms. The event, entitled, Crypto Investment Strategies 2021, aims to identify the “most popular and effective crypto investing strategies, their pros and cons, key features of active and passive investing, long-term vs short-term investments, and the benefits of diversified portfolios.”