As a seasoned analyst with over two decades of experience in traditional financial markets and the digital asset industry, I have seen my fair share of market fluctuations and trends. However, the recent performance of Ether (ETH) has been particularly noteworthy, especially considering its robust recovery from the December 10 dip.
From December 10th to 12th, Ether (ETH) experienced a surge of 11.6%. This uptick came after two consecutive days of losses. The upward trend was largely influenced by an increase in investments into Ether spot exchange-traded funds (ETFs) and heightened activity on the Ethereum network. These factors contributed to rebuilding investor trust.
As an analyst, I observed that from December 9th through December 11th, Ether-focused Exchange Traded Funds (ETFs) experienced a substantial influx of $557 million, contributing notably to the swift price rebound. However, it seems these inflows were more of an outcome rather than the initial catalyst. Investors sensed an opportunity to purchase at the dip around $3,550, predicating Ethereum’s continued dominance and the escalating adoption of Decentralized Applications (DApps).
On December 12, the total value locked within the Ethereum network reached a staggering $78 billion, marking a significant 31% jump from its $59.3 billion level just 30 days prior, as reported by DefiLlama. The primary driver of this growth can be attributed to substantial deposit boosts in platforms like AAVE, EigenLayer, Athena, Binance Staking, Spark, and Pendle. In contrast, BNB Chain saw a 10% rise during the same period, while Tron recorded an impressive 18% growth.
Compared directly, Ethereum dominates significantly as its primary rival, Solana, manages approximately $9.4 billion in deposits. Notably, Ethereum’s layer-2 solutions also control around $11 billion in deposits, which can be more aptly compared to Solana considering their exceptionally affordable transaction fees. In contrast, typical transactions on Ethereum’s primary network cost an average of $7.50 in fees.
On December 12th, the volume of transactions on the Ethereum network increased by 21%, reaching a total of approximately $24.3 billion within a 7-day span. While Solana boasts more absolute on-chain activity with around $30.7 billion in turnover during the same period, it is worth noting that the combined volumes of Ethereum’s layer-2 blockchains—including Base, Arbitrum, Polygon, and Optimism—exceeded this figure, totaling an impressive $25.6 billion over the 7-day period.
In summary, while Solana has a significant presence in the memecoin market and boasts a competitive advantage, it’s incorrect to label it as the undisputed leader. Instead, Ethereum remains dominant when it comes to liquid staking, lending, yield farming, and synthetic assets. In other words, each platform excels in different areas within the DApp volumes.
Bitwise targets $7,000 ETH price, citing ETF adoption and layer-2 growth
On December 10th, Bitwise, a well-known provider of cryptocurrency ETFs, presented a report to its institutional clients. This report contained a forecast that the price of Ethereum could reach $7,000, primarily due to an increase in the adoption of ETFs. The report also pointed out anticipated rapid growth in Ethereum layer-2 blockchains, as well as significant expansion in stablecoins and tokenized projects.
On December 11th, World Liberty Financial, a decentralized finance (DeFi) initiative linked with the US President-elect Donald Trump, exchanged USDC stablecoins for Ether, boosting its total Ether assets to more than $55 million. Many analysts speculate that this transaction may have impacted market sentiment, potentially fueling the rise in ETH prices.
Over the last three months, Ether’s value has significantly increased by about 65%. The latest drop below $3,550 on December 10 showed robust buying interest, indicating potential for more upward movement in the near future.
Although it’s uncertain if the ongoing bullish trend will propel ETH prices beyond $4,500, there’s a plausible optimistic outlook based on on-chain activities and increasing institutional interest. This strengthens Ethereum’s dominance as the forefront platform for DApp (Decentralized Application) activity.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of CryptoMoon.
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2024-12-12 22:28