When Will the DeFi Boom Reflect in Ethereum Prices?
Ethereum Bears Still Resilient Ethereum is currently priced at mid-2017 levels, a whopping 87.5% down from its all-time high this time two years ago. It is still in the depths of a two-year bear market and until it can crack $400 again will remain there. Longhash has reached out to crypto-asset research firm Delphi Digital’s Anil Lulla and Yan Liberman for more insight. The main reason for Ethereum’s weakness at the moment, according to the pair, is that DeFi markets are generating a fraction of the interest that the ICO boom did in late 2017. Some 16 million ETH was raised via ICOs from mid-2016 to mid-2018 at a time when the Ethereum supply was lower than today’s level of 109 million. The amount locked in DeFi is just a fraction of this and mostly from people already involved in crypto – not new money. “Put simply, none of these DeFi projects are attracting new capital to flow into ETH as buying pressure,” Delphi Digital revealed at the time that 60% of the ETH raised via the ICOs they tracked had been sent to exchanges which caused the price to collapse during 2018. It never really recovered in 2019 when the majority of altcoins suffered at the expense of bitcoin. So, in conclusion, only when new capital from those not already holding ETH starts flowing into DeFi will Ethereum prices begin to recover. This could happen in 2020 when DeFi markets top $1 billion and start attracting bigger investors. Further earning opportunities with new ETH staking options may also drive new money into the asset this year. Will ETH prices recover this year as DeFi grows? Add your comments below.
Images via Bitcoinist Media Library The post appeared first on Bitcoinist.com.
TheBitcoinNews.com is here for you 24/7 to keep you informed on everything crypto. Like what we do? Tip us some BATSend Tip now!