With the increasing possibility of the approval of Ethereum spot ETF, the total value locked (TVL) of AAVE has reached its highest level since the Terra thunderstorm, inflows of ETH into exchanges have reached a new high since March, and the open interest of Ethereum has also surpassed $10 billion. Please be cautious as there may be significant fluctuations.
Summary:
Bloomberg Analyst: SEC to Approve Ethereum Spot ETF “19b-4 Document” on Friday Morning
Background:
Challenges in Aave’s Layout: From Aave V3’s High Growth to GHO’s Liquidity Strategy
Table of Contents:
AAVE TVL Reaches a Two-Year High, Bullish for Ethereum Spot ETF
CryptoQuant: Inflows of ETH into Exchanges Reach a New High Since March
Open Interest of ETH Surpasses $10 Billion, Reaching a Historical High
The total value locked (TVL) of Aave, the leading decentralized lending protocol, has reached $12.966 billion, setting a new high since the Terra thunderstorm on May 6, 2022, with a 20% increase in the past 7 days.
Source:
Defi Llama
According to a report by DL News on the rapid growth of AAVE TVL this week, it is the latest sign of DeFi’s recovery from numerous disasters since the bear market in 2022, and it also indicates that cryptocurrency traders are flocking to Ethereum in large numbers after Bloomberg ETF analyst leaked that the U.S. Securities and Exchange Commission (SEC) will approve the Ethereum spot ETF’s 19b-4 document as early as Friday. Over $517 million worth of cryptocurrencies have been deposited into Aave V3 since then; the amount of cryptocurrencies borrowed by AAVE in the past 24 hours has exceeded $6.8 billion, reaching a new high since May 9, 2022.
Users may deposit ETH into Aave and borrow USDT to buy more ETH, increasing leverage while holding spot positions.
At the time of writing, the price of AAVE is temporarily reported at $95.66, with a 7-day increase of 10.3%; while ETH is priced at $3,784, with a 7-day surge of 25.6%.
Extended Reading:
Don’t Celebrate Too Early! Bloomberg Analyst: SEC to Approve Ethereum Spot ETF “19b-4” as Early as Wednesday, but One Key Step is Still Missing…
AAVE price trend in the past 7 days. Source: CoinGecko
On the other hand, although multiple sources currently indicate a significantly increased probability of approval for Ethereum spot ETF, it does not mean that we will see the listing of Ethereum spot ETF soon. Previously, Nate Geraci, President of ETFStore, pointed out in a post on Monday:
In response, Cryptoslate cited chain-based analytics firm CryptQuant, warning that if the SEC reverses its attitude and rejects the Ethereum spot ETF application or delays the approval process, ETH may incentivize a “major price adjustment,” and the increased inflows of ETH into exchanges may also cause price fluctuations in the coming days.
According to Julio Moreno, Research Director of CryptQuant, in the rumors of the potential approval of the Ethereum spot ETF, the net inflow of ETH into exchanges has reached 62,000 ETH, the highest level since March.
CryptQuant also stated that traders have opened a large number of long positions in the futures market due to expectations of price increases, resulting in upward pressure on the price and causing the open interest of ETH to exceed $10 billion on the 21st, reaching a historical high and leading to a large number of short liquidations.
Source: CryptQuant
In addition, long-term holders of ETH purchased over 100,000 ETH in a single day on the 21st, the highest daily amount since September 2023, which has become a major driving force behind the sharp rise in ETH prices this week.
Source: CryptQuant
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