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DeFi Boom Propels Ethereum (ETH) as Shanghai Upgrade Approaches, Can It Clear $2,500?

Press Releases Crypto News BeInCrypto DeFi Boom Propels Ethereum (ETH) as Shanghai Upgrade Approaches, Can It Clear $2,500?

Despite the largely negative sentiment surrounding Ethereum ahead of the Shanghai Upgrade, ETH has traded above $1,700 for ten consecutive days. Will the current gloomy social sentiment encourage crypto investors to pile in ahead of the Shanghai Upgrade?

Potential Fed rate cuts could sustain the spike in decentralized finance (DeFi) activities on the Ethereum smart contract network.

DeFi Boom Could Propel Ethereum Despite Shanghai Upgrade Uncertainty

Ethereum (ETH) has attracted new demand as crypto investors continue to move their funds into various DeFi protocols built on the Ethereum network. In addition to the decline in bank deposits, rumors of rate cuts and further dollar printing by the US Federal Reserve (Fed) have also contributed to the recent DeFi boom.

The recent spike in DeFi activity signals a prolonged Ethereum price rally, despite widespread uncertainty surrounding the upcoming Shangai upgrade.

There has been a persistent increase in the supply of Ethereum in DeFi smart contracts since March 13, according to Glassnode.

Since March 13, the supply of Ethereum in smart contracts grew by nearly 500,000 ETH (0.4% of total ETH supply in circulation), worth approximately $832 million, as of March 27.

Ethereum Supply In Smart Contracts. March 2023, Source: Glassnode

When there is an increase in the volume of tokens locked in smart contracts, it temporarily reduces the units in circulation. The relative scarcity caused by the recent DeFi boom could power Ethereum into further price gains.

Furthermore, as the scheduled Shanghai Upgrade approaches, the social sentiment surrounding Ethe

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Author: Ibrahim Ajibade

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