In between February 14th to March 13th, Ethereum’s valuation had dropped by 64.33 percent. It is fair to say that the global financial crisis had gotten the better of the largest altcoin coin during the collective crash.
However, as the market approached a sense of recovery at the moment, with ETH trading at $170 at press time. it was observed that Ethereum’s network growth rate has been on an incline in spite of the recent depreciation. Its long-term outlook pictured a positive scenario as according to Santiment’s recent data, the number of Ethereum addresses had drastically improved.
The data indicated that from January 2020 to the present day, the number of addresses on ETH had increased from 40,000 to 70,000, which is a 75 percent hike over the past 4-months. The utilization of ETH’s parent blockchain was evident as unique addresses remain a fundamental factor for identifying the long-term narrative of an asset.
Similarly, in terms of exchange balances, data from glassnode exhibited that since late 2019, the amount of there stored in various platforms has improved by more than 21 percent to over 18,187,000, which is 16 percent of the total circulating supply.
The last time exchange incurred such high levels was back in December 2016.
Researchers at Santiment had stated,
“This is a key indicator of Ethereum’s long-term potential continuing to look promising. Network growth shows the number of new addresses being created on the project’s respective network each day. Essentially, this chart illustrates user adoption over time, and can be used to identify when the project is gaining or losing traction.”
The consistent rise in addresses could also be due to the rise of decentralized finance (DeFi) platforms that utilize Ethereum blockchain and ETH as collateral on the network.
Before the crash on 13th March, the total value-locked in DeFi in terms of Ethereum was over a billion dollars but since then the market has shrunk a bit due to the market crash.
However, recoveries were already taking place in the DeFi platform as the TVL had risen from below $600 million in Mid-March to over $725 million at press time.
As the DeFi market continues to improve its credentials, the number of Ethereum addresses is likely to increase in the charts as well.
Ethereum: BackBone to Bitcoin?
Recently, Bitcoin Jack, a popular crypto analyst on Twitter stated that the importance of Ethereum has been largely undermined in the ecosystem and that is functionality is crucial for Bitcoin’s growth as well. He stated,
“Unpopular opinion: ETH has become the backbone to BTC. The amount of value already captured in ETH and the functionality provided to the ecosystem is impossible to ignore. Stablecoins (and DeFi) are becoming more important than ever. Big money understands this.”
There is no doubt that just like Bitcoin, Ethereum is here to stay because its ecosystem supports various sectors in the crypto industry, which is required for the adoption and success of crypto assets at large.
Hence, the more credibility ETH receives from the community, it may indirectly trigger the necessary boost in Bitcoin’s adoption as well.