Ethereum Price Analysis – DeFi apps continue to lock up the asset

The ETH project was proposed by Vitalik Buterin in 2013. Other co-founders include Anthony Di Iorio, Charles Hoskinson, Mihai Alisie, Amir Chetrit, …

Ethereum (ETH) is a distributed ledger and decentralized computing platform with smart contract capabilities. The crypto asset is currently second on the BraveNewCoin market cap table, with a market cap of US$41.12 billion and US$1.73 billion in trade volume over the past 24 hours.

Watch a summary of this analysis on YouTube

The ETH project was proposed by Vitalik Buterin in 2013. Other co-founders include Anthony Di Iorio, Charles Hoskinson, Mihai Alisie, Amir Chetrit, Joseph Lubin, Gavin Wood, and Jeffrey Wilcke. An Initial Coin Offering (ICO) followed in 2014. The ICO raised nearly US$16 million, with each token selling for US$0.31. The ETH ICO would eventually become one of the most profitable in history.

The network mainnet went live in July 2015 with 72 million pre-mined coins, which currently accounts for 65% of the circulating supply. On Christmas day 2019, Wilcke sent 92,000 ETH, US$11.5 million, to the Kraken exchange, presumably to sell. ETH was launched with no vesting schedule or lock-in period for the pre-mined coins.

Thus far, protocol upgrade milestones have included; Olympic in May 2015, Frontier in July 2015, Homestead in March 2016, Metropolis Part 1: Byzantium in October 2017, Metropolis Part 2: Constantinople in February 2019, Istanbul in December 2019, and Muir Glacier in January 2020.

Ethereum is upgraded through a series of Ethereum Improvement Protocols (EIPs), which are then bundled into each hard fork. The Github repository for EIPs has been extremely active since January 2019.

Ethereum Price Analysis 17 Sep 2020 (1)

Source: Github – EIPs

In total, almost 1,000 developers have contributed a cumulative 28,300 commits to the ETH project in the past year, across 241 Github repos. Most of the commits over the past year have occurred in the Solidity repo, the programming language used to write smart contracts on Ethereum.

Ethereum Price Analysis 17 Sep 2020 (2)

Source: Github – solidity

An adjacent protocol overhaul, Serenity, is currently in development and includes a full

rewrite and redesign, which will result in Ethereum 2.0. Phase zero of the herculean task could launch as early as November this year. Both versions of ETH will exist concurrently for some time before a migration is completed. Danny Ryan, Justin Drake, and Vitalik Buterin have the most commits in the ETH 2.0 repo.

Overall, ETH related repos have had more commits than any other crypto project over the past year. In December, Buterin released an alternative proposal for merging ETH 1.0 to ETH 2.0 on an accelerated schedule and less re-architecturing. Buterin also explained earlier this year that the “initial deployment of ethereum’s layer 2 scaling strategy has basically succeeded” and needs further refinement and deployment.

Ethereum Price Analysis 17 Sep 2020 (3)

Source: GitHub – eth2.0-specs

ETH 2.0 includes Sharding and Casper, which will drastically alter the network. Sharding refers to a scaling solution for horizontally partitioning data within a database. The full implementation of Casper, slated for release in 2022, will remove Proof of Work (PoW) from the network and replace it with Proof of Stake (PoS), with a block reward at 0.22 ETH/block. Currently, there are no plans to cap the total amount of ETH created.

Ethereum Price Analysis 17 Sep 2020 (4)

Source: Hsiao-Wei Wang

While the network is still PoW based, Programmatic PoW (EIP 1057) was also being discussed as a poison pill to reduce ASIC mining on a network by increasing the efficiency of GPU and FPGA mining. ProgPoW is only likely to be implemented if future hash rate increases are driven by ASICs. Bitmain, Innosilicon, and PandaMiner all have at least three ASIC miners available for the EtHash algorithm, while a new ASIC mining chip from a fourth mining company, Linzhi, was released in October 2019.

If implemented, EIP 1057 will make all current Ethash ASICs unable to mine the chain. Those using Ethash ASICs may choose to continue mining the pre-fork chain. Another possibility is that ASICs will be used to mine the Ethereum Classic (ETC) chain, which also uses the Ethash algorithm. In any case, the goal of decreasing ASIC use on the ETH chain will be successful, although likely temporary.

At US$0.04/KWh, all of the currently available Ethash ASICs are profitable. Mining profitability has increased dramatically since March, recently reaching a two-year high. However, if ETH prices fall, hash rate will likely decline.

Ethereum Price Analysis 17 Sep 2020 (5)

Source: asicminervalue

Hash rate (solid line, chart below) has steadily increased from January lows. Difficulty (dashed line, chart below) had risen steadily since April 2019, becoming disconnected from hash rate in October. This rise in difficulty despite a fall in hash rate is coded into Ethereum and known as an Ice Age, or difficulty bomb, which has activated twice before on Ethereum, once in 2017 and once in late 2018.

The most recent Ice Age was meant to serve as a transition from ETH 1.0 to ETH 2.0 and phase out PoW mining completely. However, because ETH 2.0 was not ready for deployment, the Ice Age was pushed back another four million blocks, to block 13.2 million, via a hard fork on January 2nd.

Ethereum Price Analysis 17 Sep 2020 (6)

Source: BitInfoCharts

Average block times are currently 13 seconds with blocks per day (line, chart below) currently at an all-time high. There are approximately 112.6 million ETH in circulation with inflation per annum currently at 4.40% (fill, chart below), which sits near an all-time low. Despite record fast block times, pending transactions have been ranging above 150,000 over the past few weeks, with only a few smart contracts accounting for most of the transactions.

Ethereum Price Analysis 17 Sep 2020 (7)

Source: CoinMetrics

Tether (USDT) was originally issued on the OMNI chain in 2015, but has been aggressively swapped to an ERC-20 token over the past year. In total, nearly 67% of all circulating USDT is now on the ETH chain. ERC-20 transfers are both cheaper and faster than OMNI transfers, thus many exchanges have added the option for ERC-20 USDT in recent months.

ERC-20 USDT transactions per day and average transaction values have quickly surpassed OMNI transactions per day and average transaction values. ERC-20 USDT transactions per day are now 33x OMNI USDT transactions per day. ERC-20 transfers also account for 18% of all daily transactions on ETH currently.

Ethereum Price Analysis 17 Sep 2020 (8)

Source: CoinMetrics

The Ethereum network currently has 8,900 active network nodes, 27% of which are located in the United States and nearly 68% of these nodes are running through Cloud hosting services. Due to the somewhat cumbersome hardware and time requirements of running a node, many of these nodes are run by Infura, or similar node servicers, who provide access to the network for developers. These services have become increasingly important as the blockchain continues to grow.

Nodes have several sync modes, with fast sync requiring approximately 460 GB of storage and a full archival node requiring over 5.17 TB of storage. A full node stores a snapshot of the entire network in every contract at every point in time. To contrast, a Bitcoin full node requires just over 349 GB of storage.

Ethereum Price Analysis 17 Sep 2020 (9)

Source: Etherscan

The average number of on-chain transactions per week (line, chart below) is currently 1.05 million, down from the mid-August high of 1.23 million. This remains up from a multi-year low of 430,000 in February 2019, but slightly down from the record high of 1.24 million on January 9th, 2018.

Average weekly transaction fees (fill, chart below) are now US$3.71, down from the US$4.44 all-time high. In June, fees were heavily skewed thanks to two transactions which sent $2.6 million each in fees, likely related to a gas extortion attempt or white hat hack of a Ponzi scheme. However, fees on ETH had been rising significantly over the past two months even before these two transactions were sent and have continued to rise since early June.

In September 2019 and June 2020, miners voted to increase gas limits by 25% (bottom chart, below), which has alleviated some fee pressure. Gas limits are once again near maximum capacity, increasing the possibility of further increases in the Gas ceiling.

Ethereum Price Analysis 17 Sep 2020 (10)

Source: CoinMetrics

Ethereum Price Analysis 17 Sep 2020 (11)

Source: Etherscan

The 30-day network value to estimated on-chain daily transactions (NVT) ratio (line, chart below) is currently 48 and falling. A clear uptrend in NVT suggests a coin is overvalued based on its economic activity and utility, which should be seen as a bearish price indicator, whereas a downtrend in NVT suggests the opposite. An NVT holding below 30 would likely signify bullish market conditions, as was the case from April 2017 to May 2018. NVT does not take factor in most DeFi-related transactions.

Monthly active addresses (MAAs) are currently 460,000, down from 525,000 in late August (fill, chart below). MAAs are up from a yearly low of 192,000 in February, but slightly down from an all-time high of nearly 610,000 in January 2018. Overall, MAAs remain above levels seen throughout 2017 and earlier. Unique addresses continue to grow at a rapid rate, and are just over 114 million (not shown). However, addresses can only be added to the network, and are never deleted.

Ethereum Price Analysis 17 Sep 2020 (12)

Source: CoinMetrics

The month of May 2019 marked an almost 12 month high for ICO funding, thanks to Bitfinex’s non-ETH token raise, LEO. At the same time, Initial Exchange Offerings (IEO), where crowdsales are facilitated by an exchange, are also increasing in popularity. However, these IEOs typically do not use ETH or have a native blockchain.

Globally, ICOs are increasingly moving away from public sales, likely due to fear of regulatory reproach and a shifting regulatory landscape. 2018 saw the highest number of ICOs, at 1,075, and the largest USD sum raised in one year, at US$21.48 billion. In 2019, over 120 token sales ended, raising a total of US$3.265 billion. In contrast, the total USD raise in January 2018 was US$2.81 billion.

Ethereum Price Analysis 17 Sep 2020 (13)

Transparent ICO treasury balances have reduced significantly from 2018 to present, both in USD value and in ETH quantity. May 2019 saw outflows totaling over 327,000 ETH, the largest of the entire year. In 2019, ICOs withdrew 1.24 million ETH and continued to hold just under one million ETH.

Since January 2020, ICOs have withdrawn nearly 960,000 ETH with Aragon, Kyber, Monetha, Mysterium, SingularDTV, Gnosis, and Status all withdrawing at least 10,000 ETH from their respective treasuries in January alone. Request (REQ) withdrew 15,000 ETH earlier this year. DigixDAO stakeholders also approved a measure to return all treasury funds to investors, which occurred in Q2 this year.

Over the past few months, Gnosis withdrew 98,000 ETH and Monolith withdrew 44,000 ETH. The three largest remaining treasuries are Golem, Polkadot, and iExec RLC at 333,000 ETH, 306,000 ETH, and 107,000 ETH, respectively. Polkadot’s funds were frozen in November 2017 when a bug was executed which deleted a code library for the Parity multi-sig wallet.

Ethereum Price Analysis 17 Sep 2020 (14)

The top Ethereum based dapps over the past month, ranked by volume, are led by DeFi and exchange dapps. These ETH dapps also dominate volume metrics when compared to other chains, including Tron and EOS. Uniswap also has the most reported users over the past month at 187,000.

Overall, ETH has a considerably lower number of users and transactions compared to other dapp platforms like EOS (EOS) and Tronix (TRX), both of which have no transaction fees. In February 2019, Twitter user Kevin Rooke pointed out that of the 1,375 ETH dapps, 86% had zero users and 93% had zero transaction volume. There are currently 1,997 dapps listed on dappradar, 90% of which have zero reported users or transaction volume in the past week.

Ethereum Price Analysis 17 Sep 2020 (15)

Source: DappRadar

The Decentralized Finance movement, or DeFi, has increasingly gained in popularity with the total ETH held in DeFi currently at 4.5 million ETH or US$6.38 billion. Lending and so-called “yield-farming” dapps, like Compound, have seen the biggest influx of money as their products began to provide a return for users. The Maker DAO, which uses collateralized debt positions to back the semi-stablecoin Dai and Sai, currently holds around 23% of all ETH in the DeFi ecosystem.

Several DeFi incidents this year highlight the need for robust DeFi infrastructure and testing. bZx, the fifteenth-largest DeFi protocol with over US$2.5 million worth of funds locked currently, lost US$350,000 and US$645,000 worth of ETH in two separate exploits related to flash loans and price oracle manipulation. To remedy the exploit, bZk absorbed the losses and directed future cash flows to an insurance fund until the outstanding debt is paid. The proctol had a similar incident earlier this month resulting in a US$1 million loss.

Maker DAO also experienced a US$4.5 million loss this year following a price feed delay. Maker DAO has since added USDC as collateral and MKR governance tokens were diluted and auctioned to raise funds to cover for the shortage. The loss has now been fully paid.

Ethereum Price Analysis 17 Sep 2020 (16)

Source: DefiPulse

Worldwide Google Trends data for the term “Ethereum” spiked in July 2019 and February 2020, which matched a swift increase in price. Worldwide Google Trends data for the terms “ Defi Crypto” and “Yield Farming” have increased massively in recent weeks.

Overall, searches for “Ethereum” remain down significantly from early 2018. A slow rise in searches for “Ethereum” preceded both highs in June 2017 and January 2018, likely signaling interest from new market participants at that time.

A 2015 study found a strong correlation between the Google Trends data and BTC price, while a May 2017 study concluded that when the U.S. Google “Bitcoin” searches increased dramatically, BTC price dropped.

Ethereum Price Analysis 17 Sep 2020 (17)

Source: Google Trends – “Ethereum”

Ethereum Price Analysis 17 Sep 2020 (18)

Source: Google Trends – “Defi Crypto”

Ethereum Price Analysis 17 Sep 2020 (19)

Source: Google Trends – “Yield Farming”

Technical Analysis

The current ETH/USD spot price is down 74% from the all-time high set in January 2018 and up 238% from the March 2020 lows. Most crypto assets have held an 80%+ correlation with one another from Q4 2019 to Q2 2020. Over the past few months, these correlations have decreased significantly with ETH outperforming most other assets, except for ADA and LINK. These correlations tend to decrease in a bullish market and increase in a bearish market.

Ethereum Price Analysis 17 Sep 2020 (20)

As a potential bullish trend resumes, roadmaps for future market movements can be found on high timeframes using Exponential Moving Averages, Volume Profile Visible Range, Pitchforks, Ichimoku Cloud, and divergences. Further background information on the technical analysis discussed below can be found here.

On the daily chart for the ETH/USD pair, the 50-day Exponential Moving Average (EMA) and 200-day EMA Golden Cross on February 11th was quickly followed by a bearish Death Cross on March 19th. On May 6th, these key EMAs re-crossed bullish, suggesting the 200-day EMA at US$284 will now act as support.

Based on the Volume Profile Visible Range (VPVR – horizontal bars, chart below), the current spot price now sits just above the US$300 volume node and below the US$467 volume node. Yearly Pivots, or mathematical support and resistance based on the highs and lows of the previous year, also sit at US$290 and US$460. Additionally, there are no bullish or bearish divergences on volume or RSI at this time.

The long/short open interest on Bitfinex (top panel, chart below) is currently 95% long with long positions continuing to push new all-time highs over the past few weeks. A significant price movement downwards will result in an exaggerated move further, as the long positions will continue to unwind. This is known as a “long squeeze.” However, Bitfinex long/short ratios have historically had little bearing on Ethereum price action.

Ethereum Price Analysis 17 Sep 2020 (21)

This market has also potentially established a new bullish Pitchfork (PF). Once the trend is defined, the spot price will continually attempt to return to the median line (yellow), currently at US$319. A bullish PF is invalidated once the spot price falls below the lowest support, currently at US$131. The uppermost resistance currently sits at US$777.

Ethereum Price Analysis 17 Sep 2020 (22)

Turning to the Ichimoku Cloud, four metrics are used to indicate if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. The best entry always occurs when most of the signals flip from bearish to bullish, or vice versa.

The status of the current Cloud metrics on the daily time frame with doubled settings (20/60/120/30), for more accurate signals, are bullish; the spot price is above the Cloud, the Cloud is bullish, the TK cross is bullish, and the Lagging Span above the Cloud and above the current spot price. Kijun support currently sits at US$361. The trend will remain bullish so long as price remains above the Cloud.

Ethereum Price Analysis 17 Sep 2020 (23)

Lastly, on the two-day ETH/BTC chart, trend indicators are bullish with price above the 50-period and 200-period EMAs, as well as above the Cloud. The spot price is now holding near the 0.034 BTC yearly pivot with a resolved bearish divergence on volume and RSI. Strong VPVR support sits in the 0.03 BTC zone. Further upside will likely find resistance at the VPVR and psychological level of 0.05 BTC. ETH/BTC open interest on Bitfinex is 99% long (not shown).

Ethereum Price Analysis 17 Sep 2020 (24)


On-chain fundamentals including hash rate, transactions per day, and daily active addresses, have increased since January, and are now up significantly from year-end 2019 lows. The ProgPoW consensus algorithm change is not likely coming this year, a change that would drastically alter the current Ethash mining landscape. Although ETH 2.0 is still in the early stages of development, the new protocol is actively being discussed, debated, and coded, with a phase zero release slated for as early as November this year.

The amount of ETH locked in DeFi apps has increased significantly over the past year as ETH held by ICO treasuries continued to decrease, potentially providing a new avenue to decrease the circulating ETH supply. New ICOs on the ETH chain have trended toward zero throughout 2019 and early 2020. As DeFi usage increases, on-chain metrics need to be retooled to better represent and include smart contract activity, such as Dai and Sai transfers. NVT, an inverse metric of economic utility, is currently decreasing slightly, despite significant DeFi activity.

Technicals are bullish for the ETH/USD pair based on current trend metrics, as the spot price is currently above both the 200-day EMA and the daily Cloud. Over the next few months, a target of US$750 is likely based on VPVR, yearly pivots, and a newly established bullish pitchfork.

Technicals for the ETH/BTC pair are neutral to bullish based on trend metrics, as the spot price is currently above the 400-day EMA and above the two-day Cloud. In the near term, the spot price will need to cleanly breach resistance and consolidate near the 0.03 BTC level. Overall, this may lead to the first sign of bullish continuation for the pair since ICOs peaked in mid 2018.

Tether Uses Centralized Power to Refund $1 Million in USDT

Centralized control allows Tether and Coinbase-backed USDC to work with law enforcement officials to fight illegal activity. Tether, by far the largest …

In brief

  • Tether has helped recover $1 million in lost stablecoins after a mistake sent them to an incorrect address.
  • Tether is able to perform such recoveries thanks to centralized control of the stablecoin platform.
  • Centralized control allows Tether and Coinbase-backed USDC to work with law enforcement officials to fight illegal activity.

Tether, by far the largest stablecoin provider in the cryptocurrency ecosystem, has long been chided for its centralized design. Now, that aspect of the business has shown its usefulness.

Tether CTO Paolo Ardoino announced via Twitter last Friday that Tether had returned $1 million worth of dollar-pegged Tether tokens to a group of Chinese traders who had sent the USDT to a wrong address.

The $1 million was lost after a group of anonymous Chinese DeFi users sent the funds to a contract address associated with Swerve Finance, a recent clone of Curve Finance intended to launch and operate with a more equitable token distribution. The target address accepts several stablecoins as part of a DeFi stablecoin swap protocol but, to the chagrin of the traders, isn’t set up to receive Tethers.

After Tether’s support team confirmed that the original tokens could not be retrieved from the Swerve Finance contract, Tether “froze” that address, revoking the ability for Tethers to be sent or received from it and ensuring the lost tokens can’t re-enter circulation. Should Swerve accept Tether at some point in the future, the receiving address can be replaced to accommodate user deposits.

Tether’s move injects an interesting angle to the debate over centralization in DeFi and crypto in general, casting a positive light over what is more often seen as a dark aspect of the growing stablecoin market.

Stablecoins are digital assets pegged to another asset, in this case the US dollar, that seek to prevent large price swings endemic to most cryptocurrencies. Stablecoins have become increasingly important in crypto circles over the course of 2020, with more than $14 billion Tether stablecoins in circulation and nearly $2 billion in combined value from other stablecoin options, like USDC.

USDC, another stablecoin backed by Coinbase and payment processor Circle, also uses a centralized design and has the capability to block addresses from transacting using USDC.

Both Tether and Centre, the entity technically in control of USDC, have revealed in the past that they work with law enforcement officials to track illegal activity using their stablecoins, and that those activities account for most of the address-blocking and other activity enabled through centralized control of their respective platforms.

There’s no question the type of banning and refund capabilities recently exercised by Tether go against the permissionless, decentralized ethos of the wider blockchain community. But in this instance, some traders are no doubt grateful for the break from tradition, and it seems likely such rescue requests will continue if the alternative is million-dollar losses.

DeFi & ETH2.0 Take Centre Stage as Ethereum (ETH) Turns 5

The popular smart contract platform of Ethereum (ETH) turns five years old today. It has been exactly five years since the initial release of the Ethereum …

#Bitcoin News – The latest breaking news, price and stories about BTC News

More Bitcoin Investors are Storing their BTC Offline

Bitcoin’s (BTC) Renewed Dominance Puts a Dent on Altseason

Bitcoin Breaks $10K and 3 Weeks Before One BTC Prediction


XRP Edges out Tether (USDT) on Coinmarketcap as it Aims for $0.25

Binance Ships Out Crypto Debit Cards, But in Limited Quantities

ChainLink (LINK) Ranked the Top DeFi Project on Coinmarketcap


#XRP News – The latest breaking news price and stories about Ripple XRP Coin

Tether mints $540 million in 3 days

In fact, not too long ago Tether outperformed Ripple and become the third biggest cryptocurrency by market capitalization. Being the most controversial …
  • Tether introduces $540 million to keep up with the stimulating supply.
  • Tether ranks at fourth position in the cryptocurrency chart by the market capitalization of $10 billion.
  • Investors claim that cryptocurrencies will keep rising amid the liquidity pump.

It is no surprise that Tether, the most popular stable coin is gaining momentum as Bitcoin sets a new high in 2020. As per the recent development outlined by the whale alert, an analytics platform, and blockchain tracker. Tether treasury noticed a whopping amount of $540 million within three days.

Today it generated $300 million on the Tron network before minting $120 million twice on the Ethereum network.

💵 💵 💵 💵 💵 💵 💵 💵 💵 💵 300,000,000 #USDT (299,651,480 USD) minted at Tether Treasury


— Whale Alert (@whale_alert) July 29, 2020

Tether and its achievements

Tether is a blockchain-backed cryptocurrency and its tokens are backed traditional fiat currencies, just like Euro, Dollar, or the Japanese yen. The token of Tether trades under the USDT symbol.

Tether has been doing wonders in terms of progress as the stablecoin made its way into the list of top five cryptocurrencies. In fact, not too long ago Tether outperformed Ripple and become the third biggest cryptocurrency by market capitalization.

Being the most controversial stablecoin has made it the most popular token in the industry. The stablecoin and Bitfinex, a popular cryptocurrency exchange share a history together as both entities have the same chief executive and CTO.

Moreover the CTO of Tether, Paolo Ardoino said on twitter that these transactions will be used to replenish the inventory. Tether’s preparation for stimulating demand is in full flow.

Paolo Ardoino stated:

“Note this is a (sic) authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests.”

The most prominent crypto-personalities, analysts, and investors believe that bitcoin will keep going upward due to liquidity pump.

“Bitcoin still has a lot of retail interest in it,” he said. “A lot of that retail interest shifted to the story stocks, to the tech stocks, because they were just more fun … Yesterday you saw a lot of money shift back over to gold and bitcoin.”

This means that other cryptocurrencies will be following the lead as well.

Winklevoss Twin: Next Bitcoin Bull Run Will Be ‘Dramatically Different’

Cameron Winklevoss, the billionaire founder of cryptocurrency exchange … investment vehicles by institutions to gain exposure to cryptocurrencies.

Cameron Winklevoss, the billionaire founder of cryptocurrency exchange Gemini, believes the next Bitcoin (BTC) bull run will be much different. When compared to previous bull markets, Winklevoss noted that there is substantially more capital, infrastructure, and better projects.

Winklevoss said:

“The next Bitcoin bull run will be dramatically different. Today, there’s exponentially more capital, human capital, infrastructure, and high-quality projects than in 2017. Not to mention the very real specter of inflation that all fiat regimes face going forward. Buckle up!”

Various data points hint at a significant increase in the amount of capital held by investors in the cryptocurrency market. Major cryptocurrency exchanges have also received more regulatory clarity, improving the infrastructure of the market.

Capital flows into the Bitcoin market

Two metrics primarily show that more money could be involved in the latest Bitcoin rally. First, the market capitalization of Tether (USDT) has surpassed $10 billion. Second, the assets under management (AUM) by Grayscale Investments recently achieved a new high.

Tether (USDT) market capitalization hits $10 billion

Tether (USDT) market capitalization hits $10 billion. Source: CoinMarketCap

To date, Tether is the biggest stablecoin in the cryptocurrency market. Investors, especially in countries with regulatory uncertainty, rely on the stablecoin to trade crypto assets. A rapid rise in the market cap of Tether could indicate more money is waiting to deploy on crypto exchanges.

Grayscale’s crypto-asset trusts are arguably the most widely-utilized investment vehicles by institutions to gain exposure to cryptocurrencies. Within the last quarter, the assets under management in Grayscale’s suite of products hit an all-time high at $5.1 billion.

Grayscale AUM reached $5.1 billion

Grayscale AUM reached $5.1 billion. Source: Grayscale

Grayscale CEO Barry Silbert said:

“In 2013, everybody thought we were crazy for launching a Bitcoin investment fund. Well, look at us now…”

The confluence of Tether’s market cap and Grayscale’s ballooning assets under management shows that capital held by institutions and retail traders continues to increase substantially.

Crypto market infrastructure is improving

In 2020, exchanges and banks in the U.S. primarily saw regulatory clarity regarding cryptocurrencies.

The Office of the Comptroller of the Currency of the U.S. (OCC) allows banks to provide and operate crypto custodial solutions. It is essentially a green light for financial institutions in the U.S. to get involved in the cryptocurrency market.

JPMorgan is also reported to have accepted Gemini and Coinbase, two of the largest spot exchanges in the U.S., as clients. Through this, the fear of strained banking relationships affecting exchanges and users has subsided.

Clarity around cryptocurrencies by major U.S. regulators and banks could improve the perception of the asset class by the mainstream. This means if Bitcoin approaches a new bull market, the improved sentiment around the entire industry could benefit BTC adoption and its value.

Crypto startups are finding relevant use cases

Overall, projects and companies in both the Bitcoin and crypto markets are seemingly increasing in quality. This is partially due to increased regulatory clarity and the fact that more traditional firms are willing to collaborate with crypto firms.

As an example, Bitcoin Lightning startup Zap is working with Visa and has participated in its Fintech Fast Track Program. This allows Zap to launch Visa cards as a part of the partnership.

Zap CEO Jack Mallers said:

“We’re contractually obligated to launch one in the next 12 months and we plan on launching one in the next few months.”

Better projects, increased capital, and improving infrastructure are resulting in boosted confidence levels among Bitcoin investors and this is raising sentiment across the entire sector. In the medium-term, high-profile investors are hopeful BTC would reflect these factors.

Also, don’t miss our upcoming conference Cointelegraph Crypto Traders Live.

More than 30 star speakers including Raoul Pal, John Bollinger, Mike Novogratz, DataDash and Jon Najarian will gather on July 30th to discuss the challenges of crypto trading. Join the show for over 9 hours of crypto trading content!