In 2020, 10 indicators of Ethereum have reached record highs
Editor's Note: This article comes fromCrypto Valley Live (ID: cryptovalley)Editor's Note: This article comes from
Crypto Valley Live (ID: cryptovalley)
Crypto Valley Live (ID: cryptovalley)
, Author: Lucas Campbell, translation: Lucas Campbell, reproduced by Odaily with authorization.
ETH price is still down more than 50% from its all-time high (ATH).
However...almost every other Ethereum indicator has reached an ATH in 2020.
Will the price catch up?
That will have to wait until 2021 to find out.
Currently, Lucas shows us 10 Ethereum charts that have hit new all-time highs. Thanks to Nic Carter's recent Bitcoin article for inspiring this Ethereum report.
BTC just hit its ATH.
Some information tells me that ETH is not far away.
In a broader perspective, Bitcoin is in focus in 2020.
The claim of BTC as digital gold and as the "fastest horse" as an inflation hedge tool is beginning to gain investor recognition. As a result, the asset sparked a new wave of institutional interest, driving prices to new highs.
Legendary fund managers such as Paul Tudor Jones and Stan Drunkenmiller began pouring money into the asset. Meanwhile, Square, Mass Mutual, and MicroStrategy became the first companies to hold BTC on their balance sheets.
ETH’s price is still down more than 50% from its ATH so far.
Here are ten Ethereum charts that hit ATHs in 2020:
secondary title
1. Ethereum Utilization Hit All-Time Highs
image description
Data source: Etherescan
The demand for Ethereum block space has reached its limit. The demand to use Ethereum is so high and constant that the utilization of the network is at the top, it really can't be higher.
secondary title
Data source: The Block
2. Ethereum Hashrate hits record high
image description
Despite the imminent transition to PoS, Ethereum’s hash rate has climbed to new highs. In other words, the network is more secure than ever. According to data from The Block, Ethereum’s current hash rate has exceeded 271 TH/s, surpassing its all-time high of about 240 TH/s in September 2018, which was achieved in a bear market.
Even with all Ethereum 2.0 phases working in parallel, which should roll out much faster than the initial Phase 0 rollout, it seems unlikely that the network will switch to PoS within the next six months.
secondary title
3. Open interest in ETH options hits record high
image description
Data source: Skew
The open interest of an option is the total outstanding value of the option that has not been exercised. This metric for Ethereum is already close to $1 billion. While this number is relatively small in the big picture, it does give us some important insights about the web. Nic describes this situation very elegantly in his article:
Just as derivatives were first created to allow farmers to hedge their crops, locking in specific prices for their harvests (and gaining liquidity on future crops so they can buy seeds and fertilizer today), options are to Bitcoin's producers -- Miners are also useful. Miners can roughly estimate how many bitcoins they will dig out based on their own equipment and under reasonable computing power assumptions. They can sell calls if they want to get an "advance payment" of expected mined coins. This means they promise to deliver tokens at a certain price on a certain date - but they get paid for that promise today. And with this cash advance, they can conduct financing operations more efficiently.
In the same light, the development of options on Ethereum enables miners to operate more efficiently by being able to hedge against volatility and finance operations by selling call options.
secondary title
Data source: Dune Analytics
4. The number of DeFi users has reached an all-time high
image description
Data source: Dune Analytics
At the beginning of this year, the number of DeFi users was less than 100,000, but then there was a parabolic trend and the number of users of all protocols exceeded 1 million. It should be noted that the "DeFi users" here are actually only valid addresses, so it is likely that the actual number is reported.
Anyway, this graph says it all, the number of unique wallets interacting with DeFi is completely vertical - and we all know why.
The introduction of yield farming sparked a brief period of mania in the Ethereum ecosystem. And it quickly became more frenetic. At its peak, there was daily new farming, endless yield mining activity, and waves of degens plugging into Pool 2, only to be destroyed within hours. It’s reminiscent of the ICO era, with new tokens being launched every day touting the promise of bringing billions of users to cryptocurrencies.
But it's not all bad. The crypto industry has unlocked a valuable distribution mechanism that could have a profound impact on how equity is distributed in the future. What's the point? Give ownership to those who provide and create the most value: the user.
It all depends on the individual.
It’s not hard to imagine a future in which Uber drivers receive a share of equity for each ride, or Airbnb hosts receive a share of equity for each guest they host.
secondary title
5. The total lock-up value is at the highest point in history
image description
Along with the proliferation of wallets, there has also been a massive surge in Total Value Locked (TVL), which can also be attributed in part to the yield farming craze.
secondary title
Data source: The Block
6. The volume of DEX hit a record high
image description
Data source: The Block
The rise of decentralized exchanges (DEXs) has been one of the notable events of the year. While they have been one of the most popular use cases for Ethereum, it has historically underperformed expectations. Clunky interfaces, slow transaction speeds, and many other issues plagued the first Ethereum DEXs. If you've ever been exposed to the project, you probably remember trading altcoins on EtherDelta.
Things have changed dramatically since then.
As a result of DeFi Summer, the trading volume of DEX has soared in 2020, and reached a peak of more than 25 billion US dollars in September alone. Even better, these crypto-native exchanges gained a significant advantage over centralized exchanges (CEXs), as DEX volume market share topped 15% of centralized peers - up from <1% in 2019 The average has jumped dramatically. Uniswap, Curve, and Balancer are all major movers in the space.
After all, keeping up with the permissionless, global nature of the Ethereum financial protocol should be a struggle. This is especially true for projects like Uniswap when it comes to supporting long-tail assets on Ethereum. Any ERC20 Token can be listed immediately - no jump, no listing fee, no additional operation. It's a level playing field because everyone has to play by the same rules. All you have to do is deposit initial liquidity, and that token can be accessed by anyone and anywhere — be it an exchange or a liquidity provision.
And maybe one day we'll see CEXs start trading with liquidity protocols instead of building their own infrastructure.
secondary title
7. BTC’s impact on Ethereum hits all-time high
image description
Data source: BTC on Ethereum
Now the BTC circulating in the Ethereum economy has exceeded 3.3 billion US dollars, accounting for 0.675% of all existing BTC.
Like everything else in DeFi, this number has gone wildly parabolic due to the yield farming craze. People can no longer idle their BTC. Instead, they choose to operate using any of the dozens of high-yield passive income opportunities DeFi offers. This is too good to resist.
Even better, there are more forms of Bitcoin wrappers on Ethereum than ever before. While wBTC has historically dominated the asset class, the ecosystem now has more options, including renBTC, tBTC, sBTC, and a few others.
secondary title
Data source: The Block
8. ETH held by Grayscale reached a record high
image description
Data source: The Block
But here's a little tip. While the proliferation of Grayscale's Ethereum offerings is a good sign, the main interest of institutions (they are required to mint "stakes") may be to take advantage of $ETHE's high premium rather than using it for anything meaningful long-term investment positions.
They have 6 months to wait for the assets to flip to earn a premium, so we can only imagine that at least some of these investors will end up going down the rabbit hole and start digging into their investments to understand what Ethereum is.
secondary title
9. Stablecoins on Ethereum Hit All-Time Highs
image description
Data source: CoinMetrics
The Cambrian explosion of DeFi is only possible with the growth of stablecoins or “dollar stablecoins” on Ethereum. Over the past two years, these dollar-pegged assets have flourished in the ecosystem and now represent nearly $20 billion in value on the network.
Since these synthetic dollars are publicly accessible to anyone with an internet connection, Ethereum greatly increases the dollar's reach to more users around the world. The recent events in Venezuela are a good example. Circle, the agency behind USDC, partnered with the Bolivarian Republic of Venezuela and Airtm to provide aid to Venezuelan frontline healthcare workers by using USDC.
secondary title
Data source: Dune Analytics
10. ETH in deposit contracts hits all-time high
image description
Data source: Dune Analytics
Best of all, the infrastructure built around Ethereum 2.0 will only grow.
looking to the future
Whether it's major exchanges like Coinbase or Binance supporting ETH staking, the launch of a decentralized staking provider like Rocket Pool, or better plug-and-play hardware solutions for individuals, getting involved with Ethereum 2.0 verification will only become more convenient in the future.
secondary title
looking to the future
While BTC is celebrating new price highs, Ethereum has a lot to celebrate too. A range of metrics, from fundamentals to narratives, are showing adoption of Ethereum as the global settlement layer for the Internet of Value.
The decentralized economy is being built day by day, and there is a lot of progress to prove it. Consider that the DeFi industry barely existed two years ago. Today, there are more than $15 billion in funds supporting powerful financial applications and $20 billion in tokenized dollars — all of which are accessible to anyone with an internet connection.
While I highlighted these ten, there are many other metrics breaking new records across the Ethereum economy. NFTs and digital art have reached seven-figure transaction volumes, while crypto-native financial primitives like flash loans have now soared into multi-billion dollar transaction volumes.
