Ethereum (ETH) Price Hits $2K Amidst Surge in Network Activity.

Ethereum (ETH) Price Hits $2K Amidst Surge in Network Activity.

Ethereum’s ETH token has shown resilience in recent days, maintaining a steady position above the $2,000 mark. On November 23, the price of ETH saw a modest increase, staying firm after a slight dip to $1,930 on November 21. Over the last week, Ethereum has recorded a 2.5% increase in its price and a 0.5% growth in market capitalization. This positive trend is largely attributed to better performance in decentralized applications (DApps), a rise in protocol fees, and Ethereum’s stronghold in the non-fungible token (NFT) market.

Etherium ETH Token

The sustainability of Ether’s price above $2,000 is a topic of interest, especially in light of Binance’s recent legal hurdles following its agreement with the U.S. Department of Justice. Ethereum network’s conditions have improved, diminishing investor anxiety. Binance, a major player in Ether spot trading, holds about 30% of ETH futures contracts’ open interest. The potential impact of Binance liquidating its $2.35 billion in ETH derivatives is significant. Between November 21 and 23, Binance experienced a net outflow of $1.53 billion, as reported by DefiLlama.

The regulatory environment presents both challenges and opportunities. Opinions are divided regarding Binance’s situation, with some seeing it as a demonstration of the company’s financial stability and others worried about the impending $4.3 billion fine against Binance and its former CEO, Changpeng Zhao. Bitcoin supporter Luke Broyles has advised withdrawing coins from exchanges as a precaution.

The long-term implications of Binance’s compliance with regulations and the increased scrutiny it faces are yet to be fully understood. Additionally, Binance‘s ties with stablecoin issuers like Tether, TrueUSD, and Binance USD are under scrutiny.

With government agencies uncovering undisclosed financial crimes through Binance, including its fiat payment gateways and banking partnerships, there’s an increased chance of regulatory actions against stablecoin providers. This situation is concerning for Ethereum, given Binance’s role as the third-largest ETH staker with $1.24 billion in deposits.

On the positive side, Binance’s move towards compliance could pave the way for the U.S. Securities and Exchange Commission (SEC) to approve spot exchange-traded funds (ETFs) for cryptocurrencies. Prominent mutual fund managers like BlackRock and Fidelity have shown interest in launching Ether spot-based ETFs.

The SEC’s recent lawsuit against Kraken, which excluded Ether from the list of 16 cryptocurrencies deemed securities, suggests a reduced likelihood of regulatory actions against Ethereum Foundation and entities associated with its 2015 ICO.

Ethereum’s network health appears robust, with its DApps reaching a total value locked (TVL) of $26 billion on November 23, a 5% increase from the previous week, despite a significant hack impacting dYdX. Ethereum’s market capitalization of $248 billion, while trailing Bitcoin’s $728 billion, sees similar protocol revenues. In the last seven days, Ethereum collected $54.3 million in fees, close to Bitcoin’s $57.5 million.

Ethereum has also regained its top position in NFT sales, with $12.6 million in transactions in 24 hours. While Bitcoin recently led in NFT activity, Ethereum remains the preferred choice for major NFT projects.

This positive trajectory for Ethereum on November 23 is a result of enhanced on-chain metrics, growing anticipation for spot ETF approval, and reduced regulatory concerns from its 2015 ICO.

FAQ’s

What caused the recent price stability of Ethereum’s ETH?

Ethereum’s ETH has maintained its price above $2,000 due to improved DApps metrics, increased protocol fees, and dominance in the NFT market.

How has Binance’s legal situation affected Ethereum?

Binance’s regulatory challenges and its significant role in ETH trading and staking have introduced uncertainty, impacting Ethereum’s market dynamics.

What are the potential effects of Binance’s regulatory compliance on the crypto market?

Binance’s compliance may lead to increased trust in cryptocurrencies and pave the way for SEC approval of cryptocurrency spot ETFs.

How has Ethereum’s network health been recently?

Ethereum’s network health is strong, with a 5% increase in DApps’ total value locked and sustained protocol revenue comparable to Bitcoin.

What is the significance of the SEC’s lawsuit excluding Ether as a security?

This exclusion suggests a lower risk of regulatory action against Ethereum Foundation and those involved in the 2015 ICO, providing some regulatory relief for Ethereum.

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About Victor Dsouza

Victor Dsouza is Crypto Journalist. He is keen to write about crypto tokens, crypto presale, you can follow him on twitter and LinkedIn.

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