Ether (eth) price is trading slightly higher on November 23, holding support above the $2,000 level after briefly retesting $1,930 on November 21. Over the past week, the price of Ether increased by 2.5%, while the total market capitalization grew by 0.5%. This bullish trend can be attributed to improved metrics for decentralized applications (DApps), rising protocol fees, and ethereum‘s dominance in the non-fungible token (nft) market.
To assess whether Ether can maintain its $2,000 price, the repercussions of Binance’s recent regulatory challenges following its plea deal with the US Department of Justice (DoJ) must be considered.
Investor fear eases as ethereum network conditions improve
Binance leads Ether spot trading volume and accounts for 30% of eth futures contract open interest. The closing of Binance’s eth derivatives contracts worth $2.35 billion in a short period could have significant consequences. Despite initial analyzes showing minimal changes in spreads and liquidity, Binance witnessed net outflows of $1.53 billion between November 21 and 23, as reported by DefiLlama.
The regulatory landscape presents risks and opportunities. Some see Binance’s actions as evidence of sufficient reserves, while others are concerned about the $4.3 billion fine facing Binance and its former CEO, Changpeng “CZ” Zhao. In particular, bitcoin advocate Luke Broyles recommended his followers withdraw their coins from exchanges.
Anyone who claims to know which snowflake will cause the avalanche is naïve.
However the #Binance A $4.3 BILLION fine is a really big snowflake on top of a really big snow pile.
Act accordingly.
Self-custody now.bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin– Lucas Broyles (@luke_broyles) November 23, 2023
Even if Binance continues operations and safeguards all customer assets, the long-term effects of full compliance and increased scrutiny remain uncertain. Additionally, the relationship between Binance and stablecoin issuers such as Tether (USDT), TrueUSD (TUSD), and Binance USD (BUSD) raises more questions.
Government agencies’ access to previously undisclosed money laundering and terrorist financing operations through Binance, including fiat payment gateways and banking partners, increases the likelihood of regulatory actions against stablecoin providers. This news has been particularly damaging for ethereum, given Binance’s status as the third-largest eth staker, with $1.24 billion in deposits according to DefiLlama.
However, recent regulatory developments also offer some positives. Binance’s move toward full compliance reduces the risk associated with unregulated exchanges, making it more likely that the US Securities and Exchange Commission (SEC) will approve spot exchange-traded fund (ETF) instruments for cryptocurrencies. Industry-leading mutual fund managers such as BlackRock and Fidelity have recently expressed interest in launching ETFs based on spot Ether.
Additionally, the SEC’s lawsuit against Kraken on November 20, which lists 16 cryptocurrencies as securities, excludes Ether (eth). This omission reduces the likelihood of regulatory actions against the ethereum Foundation and entities involved in the 2015 ICO, providing a silver lining amid regulatory uncertainties.
ethereum Network Health and nft Markets Increase
Assessing the health of the ethereum network, ethereum DApps achieved a total value locked (TVL) of $26 billion on November 23, representing a 5% increase from the previous week, according to DappRadar. However, an attack significantly affected dYdX, resulting in a 16% decrease in the protocol’s deposits.
While Ether’s market capitalization of $248 billion lags behind bitcoin‘s $728 billion, the two networks generate similar protocol revenues. In the last seven days, the bitcoin network collected $57.5 million in fees, compared to $54.3 million for ethereum. These figures do not include platform ecosystem fees such as the Lido, Uniswap or Maker protocols.
ethereum also regained its leading position in nft sales, recording $12.6 million in transactions in 24 hours. Despite a brief period in which bitcoin led nft activity, ethereum remains the preferred blockchain for notable nft projects.
ethereum‘s positive performance on November 23 can be attributed to improving on-chain metrics, rising spot ETF approval expectations, and easing regulatory concerns stemming from the 2015 ICO.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
