While losing value versus Bitcoin (BTC), Ethereum (ETH), the native currency of Ethereum, has shed more than half its value in dollar terms in 2022, it has remained anchored below $2,000 for a variety of reasons at this point.
A number of other variables, some of which we’ll address in more detail below, might cause the ETH price to plummet even more in June.
According to CoinShares’ weekly market report, investors have withdrew $250 million from Ethereum-based investment funds in 2022.
Other cryptocurrencies are not seeing such a large outflow. For example, in 2022, Bitcoin-based investment vehicles attracted $369 million from investors.
Meanwhile, layer-one blockchain protocols such as Solana and Cardano, which compete with Ethereum, have each received $104 million in funding.
As TerraUSD (UST) and Terra (LUNA), two tokens in Terra’s algorithmic stablecoin ecosystem, recently crashed, investors’ enthusiasm for decentralized finance (DeFi) has waned, as seen by the withdrawals from Ethereum funds.
As long as the DeFi market continues to grow, the optimistic outlook for Ethereum (ETH) will stay anchored on expectations of an increase in the number of financial apps running on Ethereum’s blockchain. Entire TVL (TVL) in Ethereum-based applications was $68.71 million on June 5, which is about two-thirds of the total TVL in DeFi.
Even still, Ethereum’s DeFi pools, which had been hovering above $100 billion until the May 9 collapse of Luna Classic (LUNC) and TerraUSD Classic (USTC), are still reflected in the TVL.
According to Tagus Capital partner Ilan Solot, Ether’s slide is likely to continue in June due to macro concerns posed by the Federal Reserve’s aggressive policies and a cautious prognosis for the DeFi industry.
Data from CryptoQuant reveals a rise of 550,459 ETH in the worldwide sum of Ether balances since May.
In all, about $950 million has been deposited into the hot wallets of exchanges since the Terra crisis began in 2013.
Investors who want to swap tokens for other assets often transfer them to a crypto exchange for that purpose. If the decline in ETH reserves on exchanges starts to reverse, then selling pressure will certainly intensify.
© 2015-2023 Coinposters. All rights reserved!