Despite the price fluctuation in Bitcoin price, activities on ERC20-based tokens have been at a peak. Bitcoin’s price is currently trading at a slightly above $33k and its dominance is at 44.6%. However, this has not deterred investors by any means. A significant number of transactions is now being observed on tokens built via the ERC-20 standard. In light of this, market speculators have opined that this may be that Ethereum is usurping Bitcoin to become the top crypto asset.
Crypto analytics firm, Santiment, in a recent data report observed that the price fluctuations on Bitcoin has not had any negative effect on the volume of transactions being done on altcoins, especially Ethereum-based tokens. Instead, activities on these tokens have shown significant increase lately. Bitcoin hit the $35k mark at the beginning of the week. It however refused to leap over that price mark after climbing to $35,920 on Monday.
Among all the ERC-20 based tokens, the ones that have shown the most activities are UniSwap’s $UNI, $Aave, $COMP and $SNX. Interestingly, these tokens are also DeFi tokens, as such the reason for their high activity is the influx of investors and traders into the DeFi space following the mid-May market crash. Moreover, DeFi protocols are also experiencing high activity as the market tries to recover from the crash.
ETH Supply on Exchanges at a Low
In a similar development, crypto exchanges have witnessed a decline similar to a 2020 low in the supply of Ethereum. Popular Crypto journalist announced this via his Twitter page, WuBlockchain. He said the volume of Ethereum on many crypto exchanges have drastically reduced, bringing to mind a similar incident in 2020.
In explaining the rationale behind the development, reports have also indicated that most Ethereum holders and investors are now withdrawing their ETH from exchanges to stake in Ethereum 2.0 deposit contracts. Ethereum 2.0 will introduce the Proof-of-Stake consensus to the blockchain, allowing users to stake on DeFi protocols and act as block validators or delegates.
While their stake is in the protocols, they earn rewards as high as 5% APY. Popular Ethereum-based DEXs like UniSwap, Compound have also seen a massive inflow of ETH of late as investors look to invest in DeFi projects. Statistics put the current supply of ETH on exchanges at 19.8 million while ETH 2.0 deposit contract has amassed up to 6 million ETH.
Is ‘Ethereum Flippening’ Really Happening?
Meanwhile, Celsius Network’s CEO, Alex Mashinsky noted that Ethereum is already overtaking Bitcoin which he termed ‘Ethereum Flippening.’ Alex further stated that Bitcoin is losing its market dominance to Ethereum. Bitcoin, apart from being the primary crypto, is also the largest by market cap. He argued that Ethereum will usurp BTC’s market cap by 2022 or 2023.
According to Alex, Celsius holds 17 billion ETH on its lending and borrowing protocol, making it the most held coin even in dollar terms. Similarly, Mike Novogratz, CEO of Galaxy Digital also opined that ETH could become the biggest cryptocurrency soon. Truly, it is not difficult to observe that this would soon happen as the Ethereum blockchain is undergoing different upgrades which will see its user base and transaction volume expand in the coming months.
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