Ethereum Jumps 10% As DeFi Sentiment Rebounds With Trump’s Victory
08 Novembre 2024 - 9:30AM
NEWSBTC
Ethereum (ETH) has jumped almost 20% over the past two days as the
broader decentralized finance (DeFi) sector rallied following
Donald Trump’s presidential victory. Ethereum Begins To Regain
Momentum The second-largest cryptocurrency by reported market cap
has lagged behind Bitcoin (BTC) and other smart contract platform
tokens like Solana (SOL) for much of the year. Related Reading:
Ethereum Analyst Shares Correlation With S&P500 – Last Dip
Before It Hits $10,000? However, following Trump’s win as
Republican US presidential candidate, ETH has witnessed a rise of
over 10% since yesterday. The token’s rise has brought attention to
one of Ethereum’s most innovative use cases to date – DeFi. In a
long-form post on X, Arthur Arthur Cheong & Eugene Yap from
crypto investment firm DeFiance Capital noted that total value
locked (TVL) in Ethereum-based DeFi protocols is rebounding. While
the analysts credit some of this growth to higher crypto asset
prices, they also highlight that trading volumes on some DeFi
platforms have “nearly recovered to 2022 levels, proving the
resurgence is real.” Cheong and Yap outline several factors that
indicate the DeFi ecosystem is heading toward the era of “DeFi
renaissance.” First, the analysts note that DeFi appears to
be emerging from the “trough of disillusionment.” For the
uninitiated, disillusionment is a phase in the Gartner Hype Cycle
when interest in a technology wanes as initial expectations are
unmet. As shown in the chart below, DeFi is moving through the
“slope of enlightenment” phase, likely headed for the “plateau of
productivity” as the technology matures. Additionally,
macroeconomic factors, including a low interest-rate environment,
are expected to boost DeFi adoption in two critical ways: reducing
opportunity costs and making loans more affordable. With
treasury bills and traditional savings accounts offering minimal
returns, investors increasingly turn to income-generating DeFi
strategies like yield farming, staking, and liquidity mining. Lower
interest rates are also likely to increase the supply of
stablecoins by making loans cheaper, thereby providing additional
liquidity to drive DeFi growth. How Is Trump Presidency Bullish For
ETH? The analysis emphasizes that the 2024 US presidential
elections can offer DeFi much required regulatory clarity. Trump’s
presidency is anticipated to bring more favorable crypto
regulations, which could boost investor confidence. Related
Reading: Ethereum Risk-To-Reward Ratio Is ‘Too Good To Pass Up’ –
Top Analyst Sets $6,000 Target Consequently, ETH is expected to
benefit from any increase in investor interest in DeFi. Analysis by
crypto experts suggests that ETH could rise to $3,400 if it clears
certain key resistance levels. There has also been a significant
increase in Ethereum whale activity, indicating that sophisticated
and seasoned ETH holders are accumulating the token in anticipation
of a potential rally. ETH faces stiff competition from rival smart
contract platforms such as Solana. According to a recent report,
the SOL DeFi ecosystem saw its TVL increase to $5.7 billion in Q3
2024. At press time, ETH trades at $2,806, up 7.1% in the
past 24 hours, with a total market cap of $338.6 billion. Featured
image from Unsplash, Charts from X.com and Tradingview.com
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