Ethereum and DeFi continue to pull the crypto market higher
Bitcoin (BTC) and Ethereum (ETH) are moving sideways, while DeFi tokens are hitting new highs. Market update.
Ethereum (ETH) is currently hovering between US$1,600 and US$1,700. The second-largest cryptocurrency fell 1.39 percent over the past 24 hours.
In addition, the bitcoin price is still struggling to recapture the US$38,000 mark. While BTC and ETH are recovering from their recent price rally, many DeFi tokens of the Bitcoin Up app are continuing their upward trend. They are mainly driven by positive comments from notable investors touting the benefits of blockchain technology and DeFi. In addition, ETH transaction fees are reaching record levels and the Ethereum network is reaching its breaking point.
Are high Ethereum transaction fees just bad?
High transaction fees mainly hurt the average user, but Grayscale and Ethereum supporters also see a positive side to it. After all, according to Ryan Sean Adams, high Ether transaction fees would only confirm how extreme the demand for ETH currently is. This would indicate that Ethereum is currently undervalued. Furthermore, it would also show how great Ethereum’s potential is if scaling solutions can be successfully implemented in the coming months and years.
Citing a Grayscale research paper published this week, Adams claims that Ethereum would actually become cheaper and cheaper if market capitalisation is compared to the transaction fees generated by the Ethereum network.
The so-called price-to-sales ratio (P/S ratio) is also used in the traditional financial world to value companies. The lower the KUV, the more attractive an investment is. Currently, there is still a debate about how applicable this valuation metric is to decentralised protocols, but it nevertheless sheds new light on Ethereum.