Ethereum (ETH) Rebounds 7% To Over $1900, Here’s Why

Ambar Warrick
May 30, 2022 Updated July 16, 2022
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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Ethereum (ETH) staged a strong recovery from recent losses on Monday, tracking broader gain in crypto markets.

The world’s second-largest cryptocurrency jumped 7% to trade above $1,900 for the first time since sinking to a 14-month low last week. A bulk of this crash came after a bug in the ETH Beacon chain raised concerns over the stability of a full switch to proof-of-stake.

But more recent data shows that despite doubts through last week, staking and DeFi interest in ETH has remained resilient. This is also factoring into ETH’s price action, with traders hoping that its switch to PoS- ETH 2.0- can support DeFi after the Terra crash.

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ETH staking grows ahead of the merge

On-chain data showed that as of Monday, the number of addresses depositing  on ETH 2.0 reached 12.7 million- with roughly 10.7% of ETH’s total supply now in ETH 2.0.

This shows that despite the recent glitch, investors are still bullish on the merge. The move is expected to make the blockchain substantially more accessible traders by reducing its energy and computing requirements.

The merge could happen by as soon as August 2022, founder Vitalik Buterin said last week.

Shifting to PoS could spur more institutional interest in ETH, given that it could make the token operate similarly to a debt instrument.

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Can the merge help save DeFi?

Terra- once the second-largest DeFi blockchain after Ethereum, has severely impacted interest in the space since its crash.

The blockchain’s tumble wiped out roughly $80 billion from DeFi, with the space continuing to decline as investors feared more regulation.

But analysts now see ETH’s merge as a potential boost for DeFi, given that it could attract much more interest into the space.

Ethereum Merge is the only positive catalyst now for battered DeFi to thaw the crypto winter

-Kelvin Wong, Market Analyst at CMC Markets said in a tweet

Other parties, including Thailand’s oldest bank, are also betting on a DeFi recovery after the Terra crash.

 

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn't trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns. You can reach him at [email protected]
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.