Research Summary
The report discusses the potential resurgence of Ethereum, highlighting the upcoming Dencun upgrade, the growth of Layer 2 solutions (L2s), and the decreasing supply of ETH on exchanges. It also covers the potential of Metis, a Layer 2 solution with a $400M ecosystem fund, and the increasing private crypto funding and stablecoin market cap. The report concludes with the latest developments in the DeFi sector.
Key Takeaways
Potential Ethereum Resurgence
- Ethereum’s Upcoming Upgrade: The report suggests that Ethereum’s next major upgrade, Dencun, could be a catalyst for a resurgence. The upgrade, expected in three months, is set to significantly decrease transaction fees on L2s.
- Growth of L2s: L2s have been growing over the past few months, hitting new all-time highs in Total Value Locked (TVL) and activity. This growth is not yet reflected in Ethereum’s price, according to the report.
- Decreasing ETH Supply on Exchanges: The supply of ETH on exchanges continues to hit new all-time lows, indicating that whales are accumulating ETH. This could lead to a supply squeeze, potentially driving up the price of Ethereum.
Metis’ Potential
- Metis’ Upcoming Developments: Metis, an Ethereum L2, is set to launch a decentralized sequencer and a $400M ecosystem fund in Q1 2024. These developments could make Metis more decentralized than other L2s and stimulate growth in its ecosystem.
Increasing Private Crypto Funding and Stablecoin Market Cap
- Private Crypto Funding: Private crypto funding has reached its highest levels since May, indicating increased interest from venture capitalists.
- Stablecoin Market Cap: The stablecoin market cap has increased by $6 billion since October, suggesting that new liquidity is flowing back into crypto.
Latest Developments in DeFi
- DeFi Developments: The report highlights several recent developments in the DeFi sector, including MicroStrategy’s $600M BTC purchase, Pancakeswap’s proposal to reduce CAKE total supply, and the launch of Infinex on the Synthetix mainnet.
Actionable Insights
- Monitor Ethereum’s Developments: With the upcoming Dencun upgrade and the growth of L2s, it may be beneficial to keep a close eye on Ethereum’s developments and market dynamics.
- Research Metis’ Potential: Given Metis’ upcoming decentralized sequencer launch and $400M ecosystem fund, it could be worthwhile to explore its potential impact on the Ethereum ecosystem and the broader crypto market.
- Track Private Crypto Funding and Stablecoin Market Cap: The increase in private crypto funding and the stablecoin market cap could signal a shift in market sentiment. Monitoring these metrics could provide insights into the overall health of the crypto market.
- Stay Updated on DeFi Developments: The DeFi sector continues to evolve rapidly. Staying updated on the latest developments can help identify emerging trends and opportunities in the space.
