Originally published on: December 12, 2024
Ethereum has seen a remarkable 11.6% rally from Dec. 10 to Dec. 12, bouncing back from recent losses and gaining momentum. This surge in price can be attributed to the significant inflows into Ethereum spot exchange-traded funds (ETFs) and the increased activity on the Ethereum network, boosting investor confidence in the cryptocurrency market.
During the period from Dec. 9 to Dec. 11, EtherETHETFs witnessed net inflows of $557 million, playing a pivotal role in the rapid price recovery. Investors capitalized on the opportunity to buy the dip at $3,550, anticipating Ethereum’s continued dominance and the rising adoption of decentralized applications (DApps).
The total value locked (TVL) in the Ethereum network spiked to $78 billion on Dec. 12, marking a 31% increase from the previous month’s $59.3 billion, according to DefiLlama. This surge was primarily fueled by growing 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 in deposits.
Ethereum remains the clear frontrunner in terms of total value locked, with Solana trailing far behind at $9.4 billion. Moreover, Ethereum’s layer-2 scaling solutions contribute an additional $11 billion in deposits, offering a more direct comparison to Solana due to their minimal transaction fees. Ethereum’s base layer transactions average fees of $7.50, showcasing its cost-effectiveness.
Despite Solana leading in absolute onchain activity with $30.7 billion in turnover, Ethereum’s layer-2 blockchains combined surpass that figure. The seven-day volumes on the Ethereum network reached $24.3 billion on Dec. 12, with Base, Arbitrum, Polygon, and Optimism recording $25.6 billion in volumes over the same period.
Overall, Ethereum commands a 47% market share in DApp volumes, challenging the notion that Solana is the sole leader. While Solana excels in memecoins, Ethereum maintains dominance in liquid staking, lending, yield farming, and synthetic assets.
With significant ETF adoption, Bitwise issued a report projecting a $7,000 price target for ETH, emphasizing the expected growth in Ethereum layer-2 blockchains and the expansion of stablecoins and tokenized projects. Institutional demand for Ethereum is on the rise, strengthening its position as the premier platform for DApp activity.
Market sentiment received a boost when World Liberty Financial, a DeFi project associated with US President-elect Donald Trump, swapped USDC stablecoin for Ether, increasing its Ether holdings to over $55 million. This transaction influenced the market positively, contributing to the uptrend in ETH prices.
Following a remarkable 65% surge in the past three months and strong buying support at $3,550, Ethereum shows promising signs of further price appreciation in the near term. While $4,500 remains a notable target, the positive onchain activity and institutional interest indicate a bullish outlook for Ethereum’s future price trajectory.
