Ether (ETH) price rose 5.5% on May 17, approaching $3,100 for the first time in 10 days. Analysts said the rise was due to a drop in demand for fixed-income products following sluggish U.S. retail sales in April. The data raised market expectations that the U.S. Federal Reserve might cut interest rates in an effort to stimulate the economy.
Economic expansion measures by central banks are generally seen as bullish for risk-on markets because they increase the money supply and reduce credit costs for businesses and individuals. Gold prices hit $2,410, just 0.8% below their all-time high, as investors sought exposure to rare assets including cryptocurrencies.
Court ruling gives confidence to Ether investors
Ether’s surge was also triggered by the US Department of Justice’s indictment released on May 15th. The indictment charges the two with wire fraud and money laundering by manipulating the Ethereum blockchain. The document states that “Ethereum is a decentralized blockchain.” […] There is no need for a trusted intermediary,” he added. “There is no central person running the Ethereum network.”
Additionally, the court noted that Ethereum’s smart contracts allow for transactions without a trusted intermediary. These statements raise the confidence of Ether investors, especially after the U.S. Securities and Exchange Commission issued a Wells notice to trading platform Robinhood on May 4 for alleged securities violations related to the cryptocurrency’s listing and custodian operations. increased.
According to Lexproof founder and CEO Orlando Cosme, such a ruling It is inconsistent Regulators classify ETH as a security “because there is no management or entrepreneurial effort by others.” While this analysis doesn’t change the odds of approval for the U.S. Spot Ether exchange-traded fund (ETF), it certainly lifts investors’ spirits.
The US SEC will issue a final ruling on VanEck’s Spot Ether ETF application on March 23rd, and is expected to issue a ruling on the conversion of Grayscale’s ETHE fund by June 18th. Although analysts expect the probability of approval to be below 35%, the regulator’s insistence on classifying Ether as an ETF has weakened security measures, leading to a rally above $3,050 on May 17. It may have contributed.
Solana co-founder Anatoly Yakovenko praised Ethereum’s network security, highlighting how impossible it is to orchestrate “invalid state transition or double-spending attacks.” In a May 17 post, Yakovenko said: Added Layer 2 scaling has reduced costs without compromising security due to the large number of validators and operators in the network.
In short, investors realized that all the obstacles Ethereum faced, such as high transaction fees and lackluster efforts to improve scalability, were actually decisions made in favor of security and decentralization. It is. Competitors Solana and BNB Chain, on the other hand, opted for solutions that allow for higher processing power, despite the benefits of greater reliance on fewer entities.
The superiority of the Ethereum network remains undisputed
Analyzing Ethereum’s dominance in decentralized application (DApp) activity reveals its strength. The growth of Layer 2 solutions such as Base has quickly gained traction due to its low fees and integration with Coinbase, the largest cryptocurrency exchange in the US, further strengthening Ethereum’s ability to become a global payments layer.
Ethereum’s 30-day DApp volume is $181.5 billion, more than seven times that of its direct competitor BNB Chain. More importantly, this trading volume decreased by only 3% compared to the previous month, while BNB Chain and Solana saw their trading volume decrease by 52% and 41%, respectively.
Related: US Senate passes resolution to overturn SEC encryption rules for banks
Analyzing unique active addresses involved in DApps yields similar results, with Ethereum up 3% in 30 days, while BNB Chain and Solana faced significant declines. Highlights of the Ethereum network include Balancer with a 34% increase in volume in 30 days, Morpho Optimizers with an 80% increase, and DODO with a 61% increase in volume.
Essentially, even if the odds of US Spot Ether ETF approval remain low, investors are realizing that the network’s dominance in the DApp ecosystem remains unaffected. This realization contributed to the ETH price increase on May 17th.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making decisions.
