Some important applications, companies,
In the article “Why Ethereum will continue Growing” four reasons were described about why this cryptocurrency would continue growing. Now three (3) more factors are presented for both current and potential users to consider the future benefits that this Blockchain may offer them.
Loans with Low Cryptographic Guarantee still Prefer Ethereum
According to Defi, there is a total value of US $411 million Ether blocked within financial applications and, although the levels have decreased, the number of options for this business model has been growing continuously since early 2018. Besides, applications like Dharma, compound and MarketDAO accumulate about US $100,000 million guaranteed loans, very impressive figures for relatively new solutions.
Nevertheless, the amount of blocked DAI has also undergone a considerable growth. Despite some hard weeks for the environment of the stablecoin or cryptocurrency anchored as a result of an adjustment in its rates, the rate of DAI retention has not been affected, substantially growing during the last months.
DAI is a token anchored to the US dollar that subsists within the MarketDAO ecosystem and is supported by Ether within its accounts. Through the implementation of a smart contract, DAI stabilizes its value with respect to the US dollar. Therefore, this asset is closely related to the events that involve the Ethereum platform.
ETH Targeted by Companies and Institutions
Microsoft says that the development of a private Blockchain within the Ethereum network will allow the asset to show its robustness in front of big technological companies. This should motivate other big companies to join the growing environment with the support of platforms like ETH.
Similarly, an internal source reported that the Commodity Futures Trading Commission (CFTC) for basic products would be interested to consider the approval of futures of Ether with cash liquidation (like those offered by Bitcoin’s CME), as long as all standards are complied with. Ethereum would become the first smart contracts platform to be approved by an American regulator for futures in traditional markets, thus giving the cryptocurrency more coverage and exposure in front of institutional capitals.
Medium-Term Optimism in the Market
Ethereum has fallen 88% since its historical maximum in January 2018; however, since mid-February the price gained terrain, obtaining an appreciation of 46%.
As an effect of the possibility of the approval of Ethereum futures by the CFTC, its price rose 11.5% on April 2nd, passing from US $162.22 to US $181.12.
Its rupture on April 2nd, after a 135-day consolidation, seems to indicate that Ethereum is ready to start a new bullish tendency. However, it would be necessary to wait for a quote higher than the 200-day moving average accompanied by Golden Cross, or the crossing of 50-day moving averages (EMA) over the 200-day EMA, which still has not occurred.
The decrease from 0.92% to 0.73% in the ETH and BTC correlation ratio during the last month may indicate that the relationship between the price movements of both may be moderating.
In bearish markets the different trading peers tend to have high correlation levels as institutional investors shrink for trading, but in bullish markets these levels tend to fall, resulting in more independent movements between cryptocurrencies.
To conclude, accumulation degrees are also relevant in the study of a potential investment. ViewBase, a platform in charge of tracking the flow of cryptocurrencies from exchange houses, says that ETH is in the 12th position as one of the currencies with the most outflows from an exchange house to a wallet during the last month, in front of other 119 ERC-20 tokens. These withdrawals may suggest a high degree of accumulation by heavy actors in the market, which indicates that the future of Ethereum may be changing positively.
By Willmen Blanco
