Originally published on: December 12, 2024
Ethereum has seen a remarkable 11.6% rally from December 10 to December 12, bouncing back from losses in the previous days. The surge in price can be attributed to the significant inflows into Ethereum spot exchange-traded funds (ETFs) and increased activity on the Ethereum network, reassuring investors.
During December 9 to December 11, net inflows of $557 million were recorded in spot Ether ETFs, playing a key role in the swift price recovery. Investors capitalized on the opportunity to buy the dip at $3,550, banking on Ethereum’s sustained dominance and the expanding adoption of decentralized applications (DApps).
The total value locked (TVL) on the Ethereum network skyrocketed to $78 billion on December 12, marking a substantial 31% increase from $59.3 billion just 30 days prior. This surge was primarily fueled by rising deposits in protocols like AAVE, EigenLayer, Athena, Binance Staking, Spark, and Pendle. In comparison, BNB Chain deposits grew by 10% while Tron saw an 18% increase during the same period.
Ethereum remains unrivaled in absolute terms with Solana, its closest competitor, holding $9.4 billion in deposits. Additionally, Ethereum’s layer-2 scaling solutions have another $11 billion in deposits, offering a direct comparison to Solana due to their minimal transaction fees. With Ethereum’s base layer transactions averaging $7.50 in fees, the network continues to showcase its dominance.
While Solana may lead in absolute on-chain activity, Ethereum’s layer-2 blockchains combined surpass those figures. Base, Arbitrum, Polygon, and Optimism collectively recorded $25.6 billion in volumes over a seven-day period, with Ethereum ecosystem maintaining a 47% market share in DApp volumes.
Bitwise, a prominent cryptocurrency ETF provider, set a target price of $7,000 for ETH, citing growing ETF adoption. Institutional clients were informed of expectations for accelerated growth in Ethereum layer-2 blockchains and significant expansion in stablecoins and tokenized projects.
The recent increase in Ether price, with a notable 65% surge over the past three months, showcases strong buying support even after dipping below $3,550 on December 10. Growing institutional demand and on-chain activity hint at favorable odds for further price gains in the short term, raising the question of whether ETH will surpass $4,500 in the near future.
With market sentiment influenced by significant transactions like World Liberty Financial exchanging USDC stablecoin for Ether, there is a constructive scenario supported by on-chain activity and institutional interest, solidifying Ethereum’s leadership in DApp activity.
