Only In Crypto: A Croissant Explains Why Ethereum Will Be Worth Trillions
27 Août 2021 - 8:00PM
NEWSBTC
Ethereum has resumed its upwards trends in the past hour, as the
U.S. Federal Reserves Chair Jerome Powell hints at an extension on
their economic stimulus policies. At the time of writing, ETH’s
price trades at $3,252 with a 4.4% profit in the daily chart. The
bulls returned to the market after almost 3 months of bearish price
action. The implementation of EIP-1559, the Ethereum migration to a
Proof-of-Stake blockchain, the growth in the DeFi sector, and more
seemed to have contributed to the current rally. Via Twitter,
pseudonyms analyst CroissantETH shared the many factors that will
contribute to Ethereum’s future appreciation in the short and long
term. The analyst claimed that ETH is “on its way to becoming a
multi-trillion dollar asset”. As a first point, Croissant pointed
to the rise in total value locked (TVL) in the DeFi sector. This
metric stood at $16 billion at the beginning of 2021 and recently
reached an all-time above $85 billion, monitored DeFi Pulse
recorded. Ethereum is the most important network in this sector, as
it hosts most of the main DeFi protocols, such as Uniswap, Curve,
SushiSwap, MakerDAO, Aave, and others. Per its total value locked,
the network could occupy the 20th position amongst the largest
banks on the planet. As a consequence of this explosive growth,
more people are sending their ETH funds into smart contracts.
Around 26% percent of ETH’s supply sits at these entities, with a
potential continuation of the trend. This dynamic contributes to
Ethereum and its deflationary supply. Investors have many
incentives to take out their ETH from the market to yield farm on
smart contracts, maximize their returns on a DeFi protocol, or
stake it on Eth 2.0 deposit contract. Croissant said: The amount of
$ETH being staked for ETH 2.0 is now worth upwards of $23B. That’s
approximately 6.1% of all $ETH. This is expected to increase
significantly after the merge to PoS Ethereum To Benefir From
Imminent Supply Shock? In addition, the newly implemented EIP-1559
has been burning millions of dollars in ETH. Over 100,000 ETH have
been burn due to this new fee model. Croissant added: IP-1559 has
been nothing short of astounding. It introduced fluctuating burns
to $ETH acting like a dividend for all users, while simultaneously
making tx fees smoother & faster for the network. Additional
data suggest a constant drop in the amount of Ethereum available on
exchanges, a metric usually associated with bullish price action
when trending downwards. As seen below, the ETH balance across all
exchange platforms is at 2019 levels. Croissant said: The balance
of $ETH held by centralized exchanges continues to drop, nearing
levels not seen since three years ago… This indicates that many
holders are not aiming to sell soon, and it may be a catalyst of
its own if it happens to continue In general, Ethereum’s on-chain
activity is up and has surpassed that of its competitors. This
translates into the amount of daily value settle on this network
estimated at $24 billion in contrast with Bitcoin’s $8.5 billion.
The Ethereum ecosystem already dominates some of the most popular
crypto trends, from DeFi to NFTs. However, there are many more,
such as Gaming and layer two applications, that could create a
bigger bullish push beyond previous ATHs and higher.
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