What to know:
- Ether spot ETFs posted a 13-day inflow streak on Wednesday, reaching nearly $2 billion in cumulative net inflows.
- Meanwhile, the total supply of ETH has reached its highest level since April 2023, but the amount of ETH burned via fees has been growing since September.
- Ether largely underperformed bitcoin and other major tokens since 2022 but saw a return in bullish sentiment after Donald Trump won the U.S. presidential elections in November.
As a seasoned researcher with years of experience in the ever-evolving crypto market, I have to say that the current state of Ethereum (ETH) is quite intriguing. The recent surge in Ether spot ETFs and the growing demand are reminiscent of the early days of Bitcoin, which I remember vividly.
According to CryptoQuant’s analysis, indicators such as investor interest, on-chain data, and network activity suggest that Ether (ETH) could potentially hit a new record high of $5,000 for the first time.
Over the past five trading days, Ether-linked ETFs have brought in an additional $2 billion, extending a 13-day streak of inflows. These funds initially accumulated their first billion dollars from July through early December, but recent data shows that they managed to secure another billion much faster – in just five days.
Over the last couple of months, the number of daily transactions has consistently ranged between 6.5 and 7.5 million, which is significantly more than the approximately 5 million transactions per day seen throughout 2023, suggesting increased network usage.
Currently, the total Ethereum (ETH) supply has attained its peak since April 2023, standing at 120 million. Simultaneously, the amount of ETH being incinerated through transaction fees has been on an upward trend since September.
In simpler terms, Burns is a process of taking Ether (ETH) tokens out of circulation by transferring them to an uncontrolled wallet. As more transactions happen on the network and demand for ETH grows, the rate at which ETH is burned increases. This decrease in supply growth results in deflationary pressure within the Ethereum ecosystem.
A more active Ethereum network indicates a higher utilization and demand for its functionalities, demonstrating the rising popularity of decentralized apps. Additionally, this heightened activity results in a larger amount of Ether being destroyed through transaction fees, which can exert downward pressure on the total Ether supply by causing the burn rate to surpass issuance during periods of increased usage.
These factors cumulatively set up ETH to retake its all-time highs from 2021 and beyond.
If the current trend in demand and supply persists, CryptoQuant predicts that Ethereum (ETH) might rise above $5,000. Based on the average purchase price of ETH (its realized price), the maximum price for ETH is estimated to be around $5,200.
Reaching this highest point was the peak for ETH during the 2021 bull market. Yet, as more investors purchase ETH at increasing costs, this ceiling price range keeps climbing up,” they stated.
As an analyst, I’ve noticed a substantial increase in the value of Ethereum, which has caused the total worth of assets secured within its ecosystem to soar to an impressive $77 billion on Thursday – the highest it’s been since early January 2022.
The majority of these assets are handled by only three significant applications: Lido, boasting more than $38 billion in staked ether and leading as the biggest liquid staking protocol; Aave, distributing approximately $19 billion across various assets, serving as a lending platform; and EigenLayer, an application for re-staking, managing around $18 billion.
In November, there has been a significant surge in various important measures within the Ethereum network. This includes revenue growth, higher transaction fees, increased creation of wallets, and a rise in on-chain volume. These trends suggest an escalation of activity compared to the relatively calm periods from May to September, as a previous analysis by CoinDesk revealed.
Since 2022, Ether has generally failed to match the performance of Bitcoin and other significant cryptocurrencies. However, optimistic sentiment towards it resurfaced following Donald Trump’s victory in the U.S. presidential elections in November, sparking renewed anticipation amongst investors for a DeFi rally.
As a crypto investor, I’ve noticed an exciting development: Trump’s campaign hints at less stringent regulations on cryptocurrencies, potentially making it smoother for Decentralized Finance (DeFi) platforms to thrive within the nation. This prospect has sparked a surge in demand for Ethereum (ETH), fueling the rapid expansion of major DeFi tokens since early November.
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2024-12-12 16:46