On Monday, Ethereum (ETH) made a big comeback after losing a lot recently. This was in line with the overall rise in cryptocurrency markets.
Ethereum (ETH) price increased by 7% to trade above $1,900 for the first time since hitting a 14-month low last week. The majority of this crash was caused by a bug in the ETH Beacon chain, which raised concerns about the stability of a full switch to proof-of-stake.
However, recent data shows that, despite doubts last week, ETH staking and DeFi intehavet has remained resilient. This is also influencing the price of ETH, with traders hoping that the switch to PoS—ETH 2.0–will allow it to support DeFi after the Terra crash.
ETH Staking Increases Ahead Of The Merge
According to on-chain data, as of Monday, the number of addresses depositing on ETH 2.0 had reached 12.7 million, representing roughly 10.7 percent of ETH’s total supply.
This demonstrates that, despite the recent hiccup, investors remain optimistic about the merge. By lowering the energy and computing requirements of the blockchain, the move is expected to make it significantly more accessible to traders.
The merge could take place as soon as August 2022, according to Vitalik Buterin, the company’s founder.
Switching to PoS could increase institutional interest in ETH by making the token function similarly to a debt instrument.
Terra, which was once the second-largest DeFi blockchain after Ethereum, has had a significant impact on interest the space since its crash.
The blockchain crash cost DeFi roughly $80 billion, and the space is still declining as investors fear more regulation.
Analysts now see ETH’s merger as a potential boost for DeFi, as it could attract significantly more interest in the space.
Kelvin Wong, Market Analyst at CMC Markets said in a tweet:
Others, including Thailand’s oldest bank, are betting on a DeFi recovery following the Terra crash.