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It has been another miserable week for Ethereum as prices continue to erode. Further declines today have left the world’s second largest crypto asset in danger of hitting a nine month low. Decentralized finance (DeFi) markets are in an opposing trend with continued growth in the sector.
Ethereum Hits $140
Ethereum is still deep in a two year bear market and it has displayed little effort to pull itself out despite solid fundamentals. Its market cap has dumped to a meager $15 billion which is a far cry from the $100 billion invested in the token in early 2018.
A 4% dump on the day has seen ETH prices collapse to $140 a couple of hours ago. Aside from the brief dip on November 25 the asset has not been this weak since late March, nine months ago.
According to Tradingview.com Ethereum plunged below $140 a couple of hours ago and remains deep in bearish territory with prices making lower lows on a regular basis.
Ethereum is now very close to its prices at the beginning of the year having wiped out all gains in a massive 60% correction over the past six months.
There is nothing specifically causing the ETH dump aside from overall bearishness on crypto markets in general. In fact Ethereum is looking strong from a technical standpoint having successfully rolled out the Istanbul upgrade which opens the next digital doors for Serenity to begin.
DeFi Don’t Care
Twitter boss Jack Dorsey’s advocating of decentralized social media is the next step in an internet free of controlling entities. The financial world is also evolving into a more decentralized nature with DeFi, which is largely based on the Ethereum ecosystem.
Oblivious of Ethereum’s stunted performance in terms of price this year, DeFi continues to grow. According to Defipulse.com new records have been made again with the total value of ETH locked in DeFi hitting 4.6 million.
The amount of actual ETH in decentralized finance platforms also peaked this week at 2.73 million which equates to 2.5% of the entire supply.
In dollar terms new records are also being made but this is largely due to the decline in Ethereum prices.
The total value locked in DDEX (@ddexio2018) shot up +20% today, setting a new all-time high for the platform #DeFi pic.twitter.com/sPCi9II9mK
— DEX.AG Token Wire (@DEXAG_TokenWire) December 11, 2019
As DeFi grows more ETH will be used and locked in to interest earning platforms as opposed to being day traded on open markets. This over time will decrease volatility and increase the value of the token.
Add this premise with the transition to a proof of stake consensus model next year and it will not be long before Ethereum pulls itself out of its two year bear market.
Image from Shutterstock
