Ethereum course does not benefit from the DeFi-Hype

The ICO-Boom in the year 2017 has sometimes been triggered by a massive increase in the Ethereum course. Both Visionary as well as scammers made the Ethereum-to-Use Protocol, to draw their tokens to spend, and from a blind investment frenzy amounts in million height.

At this time, the currently available stable tokens either not popular or did not exist, which meant that the Token-holder sold their Altcoin holdings in either ETH or BTC, if you had to convert them to USD in order to fully pay off. In particular, the former was used as a bridge currency, because the transaction fees were much more affordable than in the case of Bitcoin.

But vice versa worked because all of the ICO-investors have always had to put a couple of ETH willing to place in investments in the next “10x-ICO” in a Smart Contract to behind.

Among other reasons, this is sometimes a reason why Stablecoins the Narrative of Ethereum as a currency in question.

Stablecoins to kill the ETH-Narrative

Messari-Analyst Ryan Watkins said on Wednesday that there is no “direct reason” why the Ethereum rate with the increase of the DeFi-Token must be correlated. The latter show, in every respect, already showing signs of ICO-like investment behavior, where some of the more unknown Tokens in the past week by up to 10,000 per cent.

Watkins quoted Qiao Wang, a former Lead Investor of the Messari-products, the said 2019, that Stablecoins “would have made the Chance to destroy” that some of the platforms for Profit-search could be of importance:

Watkins explains that some of the DeFi-Token, such as a Compound or Balancer, can be directly from Coinbase or Uniswap for USD purchased, the “Ethereum-bridge”, which was in 2017, required, is eliminated. The following diagram explains this:

Source: Messari

The data from the stock exchanges, reflect this drop in demand. The metrics show that the trade volumes for Ethereum-based products, such as Spot, Futures and derivatives, have declined since 2017 significantly. Instead, stable coins like Tether have gained in importance, in spite of all the criticism and Controversy surrounding USDT:

Source: Messari.

Ethereum’s time is far from over

However, for ETH all is not lost. For a Watkins noted that the sheer progress of the DeFi-applications, probably both from a technical as well as from the institutional point of view, is a proof for the “product-market-Fitness” of Ethereum. He added:

In the last two years, Ethereum of a saving box for ICO projects to a burgeoning digital economy.

Watkins points out that the usefulness is a key factor for each currency, for example, the fact that the US Dollar due to reasons like total, worldwide acceptance and the underlying value is worth more than the Venezuelan Bolivar.

With updates such as ETH 2.0 on the horizon – the public Multi-Client Testnet in less than a week to live – is the Use of Ethereum is not so, as he would be in the near future usurped.

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