The significant fundamental growth seen by Ethereum over the past couple of months has led to a torrent of calls from investors regarding an imminent rally.
The cryptocurrency’s price, however, has remained stagnant and is showing few signs of being able to break its correlation with Bitcoin and rally independent from the rest of the market.
The growth of the Ethereum-based DeFi sector is one catalyst for a rally that many investors are watching, but one data analyst is wary of this possibility.
He is noting that the amount of capital required to fuel any significant ETH uptrend may prove to be a roadblock for its near-term growth, as the crypto market has not seen any significant inflows of fresh capital in recent times.
Analysts aren’t convinced that Ethereum is ready to rally
There are multiple narratives regarding why Ethereum could be positioned to rally in the near-term, including the potential launch of the ETH2.0 testnet in the coming months, EIP 1559, and the growth of the DeFi sector.
Although all these narratives and the events underpinning them are net-positive for ETH, they have yet to provide it with any upwards momentum.
One factor that may be suppressing the cryptocurrency is the sheer size of its market cap – which is currently sitting at $26.65 billion.
Analysts are noting that the amount of capital required to catalyze any significant Ethereum price gains simply doesn’t exist within the market at the present moment.
While specifically looking towards the narrative regarding DeFi token profits being cycled into ETH as a catalyst for upside, Ari Paul – a managing partner at BlockTower Capital – explained that the decentralized finance sector remains too small to provide ETH with any notable upside.
“Look at the relative dollar amounts. ETH is a $26 billion market cap token. If defi rallies by $2b and some fraction of that gets recycled into ETH, the sale of $1 has a *much* bigger impact on defi than a buy of $1 has on ETH.”
DeFi sector’s limited size leaves room for continued outperformance of ETH
The DeFi sector’s immense growth throughout the past several weeks and months has been driven by an inflow of capital from token investors and protocol users.
According to CryptoSlate’s proprietary data, the tokens within this fragment of the crypto market currently have an aggregated market capitalization of $3.6 billion.
Because this is only a mere fraction of Ethereum’s market cap, tokens within this sector can continue rallying without there being any substantial capital inflows.
Data analyst Ceteris Paribus spoke about this in a recent tweet, also explaining that Ethereum will need a broad institutional and macro fund participation rate to rally higher.
“We have two very different markets within crypto right now. Has always been true, but have felt it more recently. DeFi can rally without a ton of new money coming in, but BTC/ETH are at the point where they need real, institutional/macro fund flows to take it to the next level.”
Until this trend shifts and the crypto market sees heightened capital inflows, smaller DeFi-related tokens will likely continue outperforming Ethereum.
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Fidelity’s Crypto Subsidiary Targets Asian Investors To Buy Bitcoin
- Fidelity Digital Asset Services (FDAS) has partnered with Stack Funds to enable Asian investors to purchase and store cryptocurrency assets more freely and securely.
- Based in Singapore, Stack Funds is a regulated fund manager focusing on Bitcoin and other digital assets.
- According to the Bloomberg report, Stack Funds will make Fidelity’s secure custody services available to its clients, primarily based in Asia. The company outlined that the Asian market has been continuously growing in demand towards the cryptocurrency industry, especially from high-net-worth investors and family offices.
- Stack further explained that all assets under its management will be audited monthly. The firm will provide insurance coverage, weekly contributions, and redemptions to enhance capital security.
- Stack’s co-founder, Michael Collett, said that Fidelity’s involvement will enable its company to attract even more investors from the region.
- On the other hand, Christopher Tyrer, head of Fidelity Digital Assets Europe, believes that “there’s a critical need for platforms which have a deep understanding of what local and regional investors are looking for.” However, he admitted that the digital asset space has “historically lacked” such platforms.
- After its success in the US, Fidelity Digital Assets expanded its cryptocurrency services to Europe last year. The company aims at entering the Asian market as well now with the Stack Funds partnership.
Hacked? Crypto Lending Platform Cred Suspends Deposits And Withdrawals While Cooperating With Authorities
The popular cryptocurrency lending service Cred has announced that it has temporarily suspended all funds inflows and outflows. Without disclosing many details, the platform said it’s cooperating with law enforcement authorities to investigate an incident.
Cred Suspends Deposits And Withdrawals
The United States-based crypto lending platform, which recently announced joining Visa’s fast track program, updated its customers on Twitter regarding the latest troubling developments with a brief message.
“Unfortunately, we are unable to comment further at this time, but we will undertake to provide an update within the next two weeks. During this period, all inflows and outflows of funds will be suspended.” – read the statement.
Staying true to its fashion, the cryptocurrency community lashed out at Cred and its lack of details about what’s going on. This reaction prompted the lending protocol to comment once again. Firstly, Cred apologized for the concerns and inconveniences it has caused while it’s assessing the “business impact connected with a recent fraudulent incident.”
Furthermore, the post explained that Cred is currently cooperating with law enforcement authorities. However, it provided some reassurances claiming that “no client personal data or account information was compromised.”
It’s worth noting that Cred’s website reads that the platform works with “trusted security and insurance providers Fireblocks and Lockton to ensure that our customers’ digital assets have enterprise-grade security.” Nevertheless, several community members have questioned the state of their holdings on the platform, as they weren’t satisfied with Cred’s brief updates.
A Dissolved Partnership Saw This Coming?
Although it’s still unconfirmed if the so-called “incident” is indeed a hack, it seems that the issues have been transpiring for a while now. Days before Cred suspended deposits and withdrawals, one of its partners ended its relationship with the lending protocol.
The cryptocurrency wallet and trading platform, Uphold, announced on Sunday that users could no longer link their Uphold wallets to the third-party crypto lending provider Cred.
At the time of this writing, neither Uphold nor Cred have disclosed why their partnership agreement ended.
Renowned Indian-American Author Deepak Chopra May Buy Bitcoin
Deepak Chopra’s name is synonymous with meditation, mindfulness, and healing through healthy living. And according to the latest update, the world-renowned author and thought-leader is considering buying bitcoin. Mr. Chopra is also about to launch ‘Love in Action,’ his own blockchain-based token.
Deepak Chopra Officially Enters The Blockchain Space
It is important to note that Mr.Chopra had already stoked the ire of Ethereum bigwigs more than 2 years ago for being announced as a speaker at the Ethereal conference in New York in 2018. Vitalik Buterin himself blasted him as a ‘fraud’ publicly on Twitter. Nonetheless, the talk went well, as per Mr. Chopra.
Fast forward to 2020, the globally revered public speaker has announced his plans to officially launch his own token. Termed ‘Love in Action,’ its launch will coincide with Suicide Prevention Week. In the words of the Chopra Foundation, the token is a “worldwide campaign to heal the world.”
When the ex-United States (FDIC) regulator turned blockchain regulation commentator Jason Bretts tapped Chopra for technical details about the token, the latter said:
We are currently working on our strategic roadmap for the ‘Love In Action’ token. Our goal is to leverage the ‘proof of state/work’ on the Hedera platform to incentivize healthy behaviors and promote wellbeing via the token. We will initially leverage hbar as the currency and convert to our own coin in the latter part of 2021.
Mr.Chopra Also Considers Buying Bitcoin
Taking cues from Mr.Chopra’s famous interview with Oprah Winfrey, Jason marveled at the idea of Deepak sending some bitcoin to the popular celebrity talk show host. He contemplated mass adoption being sparked by that one event alone, recalling his prime goal to convince the meditation guru to buy BTC.
When the Value Technology Foundation President finally asked Mr. Chopra about his bitcoin holdings, the latter replied:
I have not bought any Bitcoin to date, but have been keen on cryptocurrency and how it can be used.
The mind-body healing practitioner also said that he doesn’t own any hbars, the native token of the blockchain protocol, which will power his own DLT project.
Brett, in his article, notes that it is not necessarily for everyone to buy bitcoin or any other cryptocurrency for that matter. It can also be just about leveraging the underlying technology for social good, which in Mr. Chopra’s case, involves improving people’s mental well-being.
Lastly, the ex-ConsenSys Policy Ambassador appreciated Mr. Chopra’s efforts at utilizing blockchain to help people live better. He said:
To the degree blockchain can be used by mental health professionals – or any professional – to help validate the truth of a person’s certification or to validate a person’s well-being seems like an excellent use of it.
Featured image courtesy of CNBC
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