Only In Crypto: A Croissant Explains Why Ethereum Will Be Worth Trillions

Reynaldo Marquez

3 years ago

3 mins read

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Ethereum has resumed its upwards trends in the past hour, as the U.S. Federal Reserves Chair Jerome Powell hints at an extension on their economic stimulus policies. At the time of writing, ETH’s price trades at $3,252 with a 4.4% profit in the daily chart.

The bulls returned to the market after almost 3 months of bearish price action. The implementation of EIP-1559, the Ethereum migration to a Proof-of-Stake blockchain, the growth in the DeFi sector, and more seemed to have contributed to the current rally.

Via Twitter, pseudonyms analyst CroissantETH shared the many factors that will contribute to Ethereum’s future appreciation in the short and long term. The analyst claimed that ETH is “on its way to becoming a multi-trillion dollar asset”.

As a first point, Croissant pointed to the rise in total value locked (TVL) in the DeFi sector. This metric stood at $16 billion at the beginning of 2021 and recently reached an all-time above $85 billion, monitored DeFi Pulse recorded.

ETH ETHUSD — Source: DeFi Pulse via CroissantETH

Ethereum is the most important network in this sector, as it hosts most of the main DeFi protocols, such as Uniswap, Curve, SushiSwap, MakerDAO, Aave, and others. Per its total value locked, the network could occupy the 20^th position amongst the largest banks on the planet.

As a consequence of this explosive growth, more people are sending their ETH funds into smart contracts. Around 26% percent of ETH’s supply sits at these entities, with a potential continuation of the trend.

This dynamic contributes to Ethereum and its deflationary supply. Investors have many incentives to take out their ETH from the market to yield farm on smart contracts, maximize their returns on a DeFi protocol, or stake it on Eth 2.0 deposit contract. Croissant said:

The amount of $ETH being staked for ETH 2.0 is now worth upwards of $23B. That’s approximately 6.1% of all $ETH. This is expected to increase significantly after the merge to PoS

Ethereum To Benefir From Imminent Supply Shock?

In addition, the newly implemented EIP-1559 has been burning millions of dollars in ETH. Over 100,000 ETH have been burn due to this new fee model. Croissant added:

IP-1559 has been nothing short of astounding. It introduced fluctuating burns to $ETH acting like a dividend for all users, while simultaneously making tx fees smoother & faster for the network.

Additional data suggest a constant drop in the amount of Ethereum available on exchanges, a metric usually associated with bullish price action when trending downwards. As seen below, the ETH balance across all exchange platforms is at 2019 levels. Croissant said:

The balance of $ETH held by centralized exchanges continues to drop, nearing levels not seen since three years ago… This indicates that many holders are not aiming to sell soon, and it may be a catalyst of its own if it happens to continue

In general, Ethereum’s on-chain activity is up and has surpassed that of its competitors. This translates into the amount of daily value settle on this network estimated at $24 billion in contrast with Bitcoin’s $8.5 billion.

The Ethereum ecosystem already dominates some of the most popular crypto trends, from DeFi to NFTs. However, there are many more, such as Gaming and layer two applications, that could create a bigger bullish push beyond previous ATHs and higher.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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