CRYPTO MOVERS AND PRICES
Crypto is broadly higher this morning, though Ripple (XRP) and Cardano (ADA) are recording losses. Spot volumes are relatively depressed compared to levels seen earlier in the year.
Crypto Story of the Day
Ethereum (ETH) has set a new all-time high with a break above its previous record of about USD 1,440. The move comes on the back of highs in other associated metrics such as record weekly transaction count, but also coincides with the network’s risky transition to ETH 2.0.
ETH threatened a decisive break beyond USD 1,450 3 times in January before finally doing so yesterday. ETH’s move to new record highs comes as coins built on top of its network have also seen record highs of their own. For example, UniSwap’s UNI token, which accounted for 19.63% (or USD 3.71 million) in fees on the network in the previous 24 hours, achieved a record market cap of 5.75 billion on Monday. The USDt stablecoin, which accounted for 9.80% of the previous 24-hour fees, or USD 2.08 million, has also been setting record highs in regard to its market cap, with USD 15.5 billion of its total 26.91 billion capitalization currently represented by tokens on Ethereum.
UniSwap has been recording daily volumes in excess of USD 1 billion in previous months. The venue’s growth as the leading DeFi exchange coincides with the rising popularity of DeFi in general. That subsector has also achieved an all-time high of 29.73 billion in terms of the value of funds locked in various protocols.
Finally, the proliferation of DeFi applications on Ethereum has contributed, in part, to the growth of USDC, a USD-backed stablecoin which has seen its market cap expand from USD 1 billion to a current 5.9 billion since the summer. Network data shows that 40% of USDC’s supply is currently locked in various smart contracts, the vast majority of which are based on Ethereum.
Overall, the percentage of ETH held in smart contracts on the network has reached 18.74%, a level only exceeded in June 2016 ahead of the demise of the DAO when that metric peaked at 23.83%. The growth of DeFi activity has also led to the number of transactions per week on the network peaking at a record high of 8.6 million on January 4.
Ethereum’s break above its previous record highs has been a long time coming for proponents of the network. Ethereum has indeed garnered attention and helped entrepreneurs and government officials alike to conceptualize a smart contract- and network-based financial system. Yet, despite Ethereum’s recent price performance, the network remains far off from achieving the ubiquitousness it imagined for itself with the moniker “world computer.”
The network is in technical flux and whether its upgrade to a proof-of-stake consensus mechanism can increase its throughput capacities is unclear. This technical transition also brings with it regulatory uncertainties. Nevertheless, Ethereum’s investors have put these concerns aside and the network’s growth, in part, represents belief in a highly automated, digitized, and smart contract-based financial infrastructure in the future.