Nick Chong · 8 hours ago · 3 min read
News › Ethereum › Analysis
ETH trades 80% below its $1,400 high, but Ethereum metrics are setting records
From a macro perspective, Ethereum has done well over recent months. Since reaching a low of ~$88 during March’s global liquidity crisis, ETH has sustained a strong rebound of 170 percent, according to CryptoSlate data.
Yet after some have considered the trend and metrics of the Ethereum network, a sentiment has spread that ETH is actually underperforming relative to its fundamental strength.
Ethereum is stronger than ever
At the current price of $238, Ethereum is more than 80 percent below its all-time high price just north of $1,400. In a cruel twist of fate, though, the fundamentals of Ethereum are stronger than ever before.
As he notes, many of Ethereum’s biggest fundamental trends and core on-chain metrics are extremely bullish, reaching or already at all-time highs. Some of these are as follows:
- The value of stablecoins has reached $8 billion, which is one-third the supply cap of ETH.
- The value of tokens locked in DeFi contracts is at $2.2 billion, up by over 200% since the start of the year.
- The number of DeFi users has hit 250,000, according to Hoffman.
- The volume of Ethereum-based decentralized exchanges has hit $500 million a week.
- And much more.
Almost everything is at ATH's on Ethereum 📈
Stablecoins – $8B
Value in DeFi – $2.2B
DAI – $186M
BTC – $135M
Tokenized Real Estate – $2.1M
Avg Daily Network Fees – $0.7M
Weekly DEX Volume – $500M
DeFi Users – 250k
⟠⟠How long until ETH joins the party?⟠⟠
— DavidHoffman.eth 🏴 (@TrustlessState) July 10, 2020
The fact that ETH hasn’t followed these fundamental trends higher is what some fund managers are referring to when they say the cryptocurrency isn’t a good investment.
What will trigger an ETH bull run?
If an exponential explosion in the number of active users, DeFi tokens, and more isn’t what spurs an Ethereum bull run, what will?
According to most, the launch of the Ethereum 2.0 upgrade is what will trigger the bull run.
For those that are unaware, a brief recap: ETH 2.0 is an all-encompassing upgrade that will overhaul how the blockchain works, making it much faster and cheaper than the current iteration while promoting decentralization. It will do so by implementing technologies such as Proof of Stake and sharding.
What’s important to the price narrative is Proof of Stake, also known as staking. Staking will incentivize the locking up of ETH, thus reducing the supply that can be sold on the market, while also promoting investors to buy large amounts of the cryptocurrency.
Investors believe that should the incentive structure be proper, it will do enough to cause ETH to rocket higher. Professor and crypto investor Adam Cochran went as far as to say that the implementation of staking and the rest of the ETH 2.0 upgrade will cause the “largest economic shift in society.”
Unfortunately for ETH bulls, there is considerable uncertainty about the upgrade.
Just recently, Justin Drake of the Ethereum Foundation said that he doesn’t think the first phase (“phase 0”) code of the upgrade can be rolled out in 2020, despite statements from others claiming otherwise.
“Ethereum 2.0 is exceptionally complicated. With so many committees, shards and voting types it seems reasonably likely that something will go wrong and that there will be significant further delays.”