Značka: ETH

Demand for liquid Ethereum staking options continues to grow post-Merge

Blockchain data analytics carried out by Nansen highlights the ever-growing amount of Ether (ETH) being staked across various staking solutions in the months following Ethereum’s shift to proof-of-stake (PoS) consensus.The highly anticipated Merge has been a boon for decentralized finance (DeFi) in general, and staking solutions have been in high demand since Ethereum’s shift to PoS. This is according to blockchain data from a variety of staking solutions across the Ethereum ecosystem.Nansen’s report highlights the impact of the Merge in introducing staked ETH as an out-and-out cryptocurrency-native yield-bearing instrument that has quickly outstripped other collateralized yield-bearing services. The likes of Uniswap and other automated-market makers and liquidity providers remain popular but pale in comparison to the total value locked in staked ETH solutions. Over 15.4 million ETH is locked in Ethereum’s staking contract, which values the total staked ETH in the top six cryptocurrencies by market capitalization alone:“Staked ETH is thus the first yield-bearing instrument to reach significant scale in DeFi, and has the potential to both significantly grow and radically transform the ecosystem in the coming years.”Nansen provides some interesting insights from liquid-staked derivatives data. When Ethereum shifted to PoS, miners were replaced by validators who had to deposit or stake 32 ETH in order to propose new blocks and earn protocol rewards. Users that are unable or unwilling to stake 32 ETH can participate in pooled staking, also known as liquid staking. This also allows users to withdraw staked ETH at any time.Nansen’s metrics reveal that liquid staking holdings are weighted toward long-term holders, while recently launched protocols are attracting new deposits faster than established services. 5.7 million of the total 14.5 million ETH is staked in staking pools like Lido and Rocket Pool, accounting for over 40% of the total staked ETH in the ecosystem.Lido’s stETH dominates the space with a 79% share of the total market supply of staked ETH. 52% of the stETH tokens are found in Aave, Curve and Lido’s wrapped stETH contract indicating interest and utility for investors and DeFi applications. stETH has also seen a 127% increase in average daily trading volume since the Ethereum Merge.Related: 64% of staked ETH controlled by 5 entities — NansenMeanwhile, Coinbase’s Ethereum staking pool cbETH has surpassed all other assets besides stETH in supply. Both Rocket Pool’s rETH and Coinbase’s cbETH have seen the most growth over the past three months, at 52.5% and 43.3%, respectively.The growth of Coinbase’s ETH staking option also suggests that everyday users still trust centralized entities and are content earning yield from staked ETH as opposed to more complex, on-chain, yield-bearing strategies.

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Crypto awakening: Researcher explains ETH exodus from exchanges

Blockchain analytics carried out by a Nansen researcher has highlighted outflows of Ether (ETH) and stablecoins from centralized exchanges in the wake of FTX’s collapse.Nansen research analyst Sandra Leow posted a thread on Twitter unpacking the current state of Decentralized Finance (DeFi), with a specific focus on the movement of ETH and stablecoins from exchanges.As it stands, the Ethereum 2.0 deposit contract contains over 15 million ETH while some 4 million Wrapped ETH are held in the WETH deposit contract. Web3 infrastructure development and investment firm Jump Trading holds over 2 million ETH tokens and is the third largest holder of ETH in the ecosystem.The current state of DeFi in @nansen_ai charts — sandra lmeow (@sandraaleow) November 22, 2022Binance, Kraken, Bitfinex and Gemini wallets feature in the largest ETH balances list while the Arbitrum layer 2 roll-up bridge also holds a significant amount of Ether.As Leow explained in correspondence with Cointelegraph, the percentage increase of ETH held in smart contracts can be seen as an indicator of ETH flowing into various DeFi products. This includes decentralized exchanges, staking contracts and custody services.The recent collapse of FTX may have als led to fears for users holding assets with third-party custodians like centralized exchanges. Leow highlighted the reality that the safety of funds held on exchanges may not be guaranteed:“There is an amplification for the quote, “Not your keys, not your coins”, and this is especially important given times like these.”According to Nansen’s exchange flow dashboard, Jump Trading stands out as an entity with significant withdrawal volumes from exchanges in comparison to their deposits. Leow presented a number of possible reasons for Jump Trading’s token movements, noting the firm’s exposure to liquidity hub Serum (SRM) tokens:“Due to their exposure to the FTX fallout, they had to offload some tokens out of exchanges in need of liquidity. In the last 7D, we’ve seen Jump Trading withdrawing ETH, BUSD, USDC, USDT, SNX, HFT, CHZ, CVX, and various other tokens from multiple exchanges.”A substantial amount of ETH has flowed out of a number of major exchanges over the past seven days as well. $829 million worth of ETH departed from Gemini, while Upbit saw $797 millions of ETH moved from its account. $597 million of ETH flowed out of Coinbase while Bitfinex also saw around $542 million worth of ETH withdrawn from its platform.The past week also saw a significant amount of stablecoins moved off exchanges. Stabelcoins worth $294 million flowed out of Gemini, while Bitfinex saw $173 million moved off its platform. KuCoin and Coinbase followed, with $138 million and $108 million of stablecoins withdrawn from the two exchanges respectively.Leow also unpacked in on the movement of stablecoins, telling Cointelegraph that outflows typically indicate users are on the sidelines and capital is not flowing into the cryptocurrency space:“Perhaps, the market contagion and prolonged bear market reduces the appetite for traders to be actively investing and involved in the space.”Nansen has played its part in delivering key insights into major ecosystem events in 2022. The blockchain analytics firm delved into on-chain data to piece together the collapse of Terra in May 2022. It then followed suit with a deep-dive into FTX’s collapse, with evidence suggesting collusion between the exchange and crypto trading firm Alameda Research. Both firms were created and controlled by Sam Bankman-Fried.

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FTX crisis leads to record inflows into short-investment products

Institutional investors have responded to the negative sentiment caused by FTX’s collapse, with record institutional inflows into crypto-focused short-investment products. According to CoinShares’ chief strategy officer James Butterfill, 75% of the total inflows by institutional crypto investors for the week ending Nov. 18 were placed in short investment products — essentially a bet that crypto prices will decline.Butterfill said the takeup of short positions by investors is likely “a direct result of the ongoing fallout from the FTX collapse,” while the total assets under management (AUM) for institutional investors is now at $22 billion — the lowest in two years.Over the week, $14 million was poured into short-ETH investment products. CoinShares said it was “the largest weekly inflow on record.”CoinShares cited “renewed uncertainty” over Ethereum’s Shanghai upgrade slated for Sep. 2023 and mentioned that the sizeable amount of ETH held by the FTX exploiter as possible reasons for the negative sentiment.Inflows into short investment products for Bitcoin (BTC) hit $18.4 million. Bitcoin short products were reported to have an AUM of $173 million coming close to the $186 million high.Investors are also seemingly dropping altcoins with Solana (SOL), XRP (XRP), BNB (BNB), and Polygon (MATIC) product outflows totaling $6 million.The newly reported inflows are a slight change from the week prior which saw the largest inflows in 14 weeks to crypto products totaling $42 million, although short Bitcoin products already started to see inflows of $12.6 million and blockchain equity products recorded the largest weekly outflow since May 2022.Related: FTX will be the last giant to fall this cycle: Hedge fund co-founderMeanwhile, the ripple effect of investor distrust for centralized exchanges is taking hold in the traditional finance market with Coinbase posting an all-time low share price on Nov. 21.The crypto exchange’s share price dropped 8.9% on the day, slipping to under $41 according to Google Finance. It has now slightly recovered to around $41.20 at the time of writing but continued to trade at a slight 0.19% negative after hours.Coinbase’s stock price is down almost 88% since it went public on Apr. 16, 2021.

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FTX hacker is now the 35th largest holder of ETH

The hacker that exploited the now-bankrupt FTX exchange last week made a tidy fortune that has propelled them to Ether (ETH) whale status.Just a day after the embattled FTX exchange filed for Chapter 11 bankruptcy, its wallets were drained for more than $663 million in various crypto assets, according to blockchain intelligence company Elliptic.Elliptic suspected $477 million of this was stolen, with a large chunk of those tokens being then converted into ETH, while $186 million worth of more than a hundred different tokens was believed to be moved into secure storage by FTX itself.As reported by Cointelegraph on Nov. 15, the attacker was still draining wallets four days later in what analysts called “on-chain spoofing.”According to blockchain security firm Beosin, the attacker has conducted multiple swaps and cross-chain transactions over the past day and currently holds around $338 million in crypto assets as of Nov. 15.FTX Accounts Drainer (0x59AB…32b) has conducted multiple swap and cross-chain operations for the past day and currently holds ~$338,598,702 of assets. The majority of the funds are held in the 0x59ABf3837Fa962d6853b4Cc0a19513AA031fd32b address. Current balance: pic.twitter.com/SMrkbcwULL— Beosin Alert (@BeosinAlert) November 15, 2022Included is a whopping 228,523 ETH according to the wallet address, worth around $288.8 million at current market prices.This makes the account dubbed the “FTX Accounts Drainer” the 35th largest Ethereum holder in terms of the number of ETH held.According to CoinCarp’s Ethereum rich list, the top holder is the Beacon Chain deposit contract which contains around 15 million ETH. Furthermore, most of those in the top 20 are crypto exchanges, layer-2 protocols, and Decentralized Finance (DeFi) bridges.The top 20 ETH wallets hold 27.7% of the entire circulating supply and the top 50 hold a third of all ETH.The exploits occurred on both FTX and FTX.US leading many to speculate that it could have been an inside job. Director of security operations at analytics firm Certik, Hugh Brooks, alluded to on-chain evidence suggesting such. He told Cointelegraph on Nov. 15 that unless there was a private key compromise, an insider with access to these wallets moving the funds cannot be ruled out.Related: FTX bankruptcy freezes millions worth of crypto company fundsEther prices have not been impacted by the potential offloading of its 35th-largest holder flooding the markets.At the time of writing, ETH was trading flat on the day at $1,260 according to CoinGecko. The asset has lost around 23% since the FTX debacle began.

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Ethereum flashes a classic bullish pattern in its Bitcoin pair, hinting at 50% upside

Ethereum’s native token, Ether (ETH), looks poised to log a major price rally versus its top rival, Bitcoin (BTC), in the days leading toward early 2023.Ether has a 61% chance of breaking out versus BitcoinThe bullish cues emerge primarily from a classic technical setup dubbed a “cup-and-handle” pattern. It forms when the price undergoes a U-shaped recovery (cup) followed by a slight downward shift (handle) — all while maintaining a common resistance level (neckline).Traditional analysts perceive the cup and handle as a bullish setup, with veteran Tom Bulkowski noting that the pattern meets its profit target 61% of all time. Theoretically, a cup-and-handle pattern’s profit target is measured by adding the distance between its neckline and lowest point to the neckline level.The Ether-to-Bitcoin ratio (or ETH/BTC), a widely tracked pairing, has halfway painted a similar setup. The pair now awaits a breakout above its neckline resistance level of around 0.079 BTC, as illustrated in the chart below. ETH/BTC weekly price chart featuring a cup and handle. Source: TradingViewAs a result, a decisive breakout move above the cup-and-handle neckline of 0.079 BTC could push Ether’s price toward 0.123 BTC, or over 50%, by early 2023.ETH/BTC weekly price chart featuring cup-and-handle breakout setup. Source: TradingViewTime to turn bullish on ETH?Ether’s strong interim fundamentals compared with Bitcoin further improve its possibility of undergoing a 50% price rally in the future.For starters, Ether’s annual supply rate fell drastically in October, partly due to a fee-burning mechanism called EIP-1559 that removes a certain amount of ETH from permanent circulation whenever an on-chain transaction occurs. Ethereum supply rate post-Merge. Source: Ultra Sound MoneyXEN Crypto, a social mining project, was mainly responsible for raising the number of on-chain Ethereum transactions in October, leading to a higher number of ETH burns, as Cointelegraph previously covered.Over 2.69 million ETH (approximately $8.65 billion) has gone out of circulation since the EIP-1559 update went live on Ethereum in August 2021, according to data from EthBurned.info.It shows that the more clogged the Ethereum network becomes, the higher Ether’s probability of entering a “deflationary” mode gets. So, a depleting ETH supply may prove bullish, if the coin’s demand rises simultaneously. In addition, Ethereum’s transition to a proof-of-stake consensus mechanism via “the Merge” has acted as an Ether-supply sucker, given that each staker — whether an individual or a pool — is required to lock away 32 ETH in a smart contract to earn annual yields.The total supply held by Ethereum’s PoS smart contract reached an all-time high of 14.61 million ETH on Oct. 31.Ethereum 2.0 total value staked. Source: GlassnodeIn contrast, Bitcoin, a proof-of-work (PoW) blockchain that requires miners to solve complex mathematical algorithms to earn rewards, faces persistent selling pressure.Related: Public Bitcoin miners’ hash rate is booming — But is it actually bearish for BTC price?In other words, there is a comparatively higher selling pressure for Bitcoin versus Ether.ETH/BTC needs to break the range resistanceEther’s road to a 50% price rally versus Bitcoin has one strong resistance area midway, acting as a potential joy killer for bulls.In detail, the 0.07 BTC–0.08 BTC range has served as a strong resistance area since May 2021, as shown below. For instance, the December 2021 pullback that started after testing the said range as resistance resulted in a 45% price correction by mid-June 2022.ETH/BTC weekly price chart. Source: TradingViewA similar pullback could have ETH test the 0.057–0.052 range as its primary support target by the end of this year or early 2023.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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