TradeBlock Research Recording Increased Demand for Ethereum on Decentralized Financial Platforms
Despite the fact that Ethereum (ETH) has once again lost its rank to Ripple’s XRP with having a hard time keeping the spot of the second-largest cryptocurrency by market capitalization, TradeBlock recorded increased demand for ETH at the beginning of 2019.
The increased demand is clearly visible in the sector of decentralized financial platforms, as showcased by John Todaro from TradeBlock.
Demand for Ether to Drop Despite Previous Increases, Todaro Predicts
Announced on January 4th on Twitter in an official post by John Todaro, Head of Digital Currency Research at TradeBlock stated that Ethereum has been showcasing an increased demand on decentralized financial platforms (DeFi) in the last three months in the period from November to January.
Despite the fact that November brought major price cuts in the market, decreasing the overall value of the cryptocurrency market by -50% in a matter of weeks, Todaro claims that based on the research, up to 10,000 ETH units were being sold on DeFi platforms Compound Finance and MKR.
That demand increased to 19,000 ETH units each day on the same platforms around the end of 2018 and the beginning of 2019, showcasing an obvious increase in the demand for Ether.
This case may not come as a surprise since Ethereum dev teams are working on bringing scalability to the network, that way improving the general performance of the platform, where one of the major milestones would be enabling 1 million transactions per second.
Since Ethereum is also said to be recording an increasing number of Dapps within the mentioned timeframe this case could explain how demand jumped to 19,000 ETH.
However, Todaro also indicated how this demand will soon decline, suggesting that the daily trading volumes would drop from 19,000 ETH to 12,000 ETH.
“Natural Demand for ETH Will Soon Outstrip Natural Supply”
As John Todaro concludes at the end of his post, the natural demand for Ethereum is said to surpass the natural supply soon.
That means that the price of ETH in the market should consequently rise as the demand is increasing and the number of the available supply wouldn’t be enough to satisfy the demand at one point.
The potential increase in the demand of ETH after the predicted drop that has in a way come true with the latest decrease of -11% in the course of the last seven days, which made ETH sink to the third spot by market capitalization once again.
In the meanwhile, the beginning of the year brought a buying pressure in the OTC Wall Street market, also recording the general increase in altcoin and stable coin trading.
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