Ethereum (ETH) price reclaims $2K as data shows a surge in network activity
Despite regulatory action against Binance, a surge in Ethereum network activity and the expectation of a spot ETF approval fueled a price move above $2,000. 4175 Total views 16 Total shares Listen to article 0:00 Market Analysis Join us on social networksEthers (ETH) price is trading slightly higher on Nov. 23, maintaining support above the $2,000 level after briefly retesting $1,930 on Nov. 21. Over the past week, Ethers price has increased by 2.5%, while the total market capitalization has grown by 0.5%. This uptrend can be attributed to improved decentralized applications (DApps) metrics, increased protocol fees and Ethereums dominance in the nonfungible token (NFT) market.
To assess whether Ether can sustain its $2,000 price point, one must consider the repercussions of Binances recent regulatory challenges following its plea deal with the United States Department of Justice.Investor fear drops as Ethereum network conditions improve
Binance leads in Ether spot trading volume, accounting for 30% of ETH futures contracts open interest. The closure of Binances $2.35 billion worth of ETH derivatives contracts within a short period could have significant consequences. Despite initial analyses showing minimal changes in spreads and liquidity, Binance witnessed net outflows of $1.53 billion between Nov. 21 and Nov. 23, as reported by DefiLlama.
The regulatory landscape presents risks and opportunities. Some view Binances actions as evidence of sufficient reserves, while others are concerned about the $4.3-billion fine facing Binance and its former CEO, Changpeng CZ Zhao. Notably, Bitcoin advocate Luke Broyles advised followers to withdraw their coins from exchanges.
Anyone that claims to know which snowflake will cause the avalanche is naieve.
However… The #Binance $4.3 BILLION fine is a really big snowflake atop a really big pile of snow.
Self custody now.#Bitcoin Luke Broyles (@luke_broyles) November 23, 2023
Even if Binance continues operations and safeguards all client assets, the long-term effects of full compliance and increased scrutiny remain uncertain. Additionally, the relationship between Binance and stablecoins like Tether (USDT), TrueUSD (TUSD) and Binance USD (BUSD) raises further questions.
Government agencies gaining access to previously undisclosed money laundering and terrorist financing operations through Binance, including fiat payment gateways and banking partners, increases the likelihood of regulatory actions against stablecoin providers. This news has been particularly detrimental to Ethereum, given Binances status as the third-largest ETH staker, with $1.24 billion in deposits, according to DefiLlama.
However, recent regulatory developments also offer some positives. Binances move toward full compliance reduces the risk associated with unregulated exchanges, making it more likely for the U.S. Securities and Exchange Commission to approve spot exchange-traded fund (ETF) instruments for cryptocurrencies. Leading industry mutual fund managers, such as BlackRock and Fidelity, have recently expressed interest in launching Ether spot-based ETFs.
Furthermore, the SECs lawsuit against Kraken on Nov. 20, which lists 16 cryptocurrencies as securities, excludes Ether. This omission reduces the likelihood of regulatory actions against the Ethereum Foundation and entities involved in the 2015 initial coin offering (ICO), providing a silver lining amid regulatory uncertainties.Ethereum network health and NFT markets surge
Assessing the Ethereum networks health, Ethereum DApps achieved a total value locked (TVL) of $26 billion on Nov. 23, representing a 5% increase from the previous week, according to DappRadar. However, a hack significantly impacted dYdX, resulting in a 16% decline in the protocols deposits.Top blockchains by active addresses and DeFi TVL. Source: DappRadar
While Ethers market capitalization of $248 billion trails behind Bitcoins $728 billion, the two networks generate similar protocol revenues. Over the past seven days, the Bitcoin network has collected $57.5 million in fees, compared to Ethereums $54.3 million. These figures do not include ecosystem fees from platforms like Lido, Uniswap or Maker protocols.
Ethereum also reclaimed its leadership position in NFT sales, recording $12.6 million in transactions within 24 hours. Despite a brief period where Bitcoin led in NFT activity, Ethereum remains the preferred blockchain for prominent NFT projects.
The positive performance from Ethereum on Nov. 23 can be attributed to improved on-chain metrics, growing expectations of a spot ETF approval and reduced regulatory concerns stemming from the 2015 ICO.
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 authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. # Cryptocurrencies # Altcoin # Ethereum # ETF # DApps # Changpeng Zhao # Markets # Cryptocurrency Exchange # Department of Justice # Binance # Stablecoin # Market Analysis # Ether Price
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