Wednesday, 19 June 2024

Crypto News

Ethereum price falls as regulatory worries and pause in DApp use impact investor sentiment

Ethereum price falls as regulatory worries and pause in DApp use impact investor sentiment

Ether (ETH) is struggling to maintain the $2,000 support as of Nov. 27, following its third unsuccessful attempt in 15 days to surpass the $2,100 mark. This downturn in Ether’s performance comes as the broader cryptocurrency market sentiment deteriorates, thus one needs to analyze whether 

It’s possible that recent developments, such as the U.S. Department of Justice (DOJ) signaling potential severe repercussions for Binance founder Changpeng “CZ” Zhao, have contributed to the negative outlook.

In a filing on Nov. 22 to a Seattle federal court, U.S. prosecutors sought a review and reversal of a judge’s decision permitting CZ to return to the United Arab Emirates on a $175-million bond. The DOJ argues that Zhao poses an “unacceptable risk of flight and nonappearance” if allowed to leave the U.S. pending sentencing.

Ethereum DApps and DeFi face new challenges 

The recent $46 million KyberSwap exploit on Nov. 23 has further dampened demand for decentralized finance (DeFi) applications on Ethereum. Despite being previously audited by security experts, including a couple in 2023, the incident has heightened concerns about the safety of the overall DeFi industry. Fortunately for investors, the attacker expressed willingness to return some of the funds, yet the event underscored the sector’s vulnerabilities.

Additionally, investor confidence was shaken by a Nov. 21 blog post from Tether, the firm behind the $88.7 billion stablecoin USD Tether (USDT). The post announced the U.S. Secret Service’s recent integration into its platform and hinted at forthcoming involvement from the Federal Bureau of Investigation. 

The lack of details in the announcement has led to speculation about an increasingly stringent regulatory landscape for cryptocurrencies, especially with Binance facing heightened scrutiny and Tether’s closer collaboration with authorities. These factors are likely contributing to Ether’s underperformance, with various on-chain and market indicators suggesting a decline in ETH demand.

Investors become cautious as ETH on-chain data reflects weakness 

Ether exchange-traded products (ETPs) saw only a $34 million inflow in the last week, according to CoinShares. This figure is a modest 10% of the inflow seen by equivalent Bitcoin (BTC) crypto funds during the same period. The competition between the two assets for spot exchange-traded fund (ETF) approval in the U.S. makes this disparity particularly noteworthy.

Moreover, the current 7-day average…

Click Here to Read the Full Original Article at News…