Bankless: Why did ENA rise against the trend?
Original title: "Ethena's Bullish Pump"
Original author: Jack Inabinet, Bankless
Original translation: Frost, BlockBeats
Editor's note: In the case of many altcoins falling, ENA was able to rise against the trend. Crypto researcher Jack Inabinet discussed the reasons for its rise and made his own views on whether the rise is sustainable and the source of the project's income. BlockBeats translated the original text as follows:
Many altcoins have been falling in the recent market, but Ethena's ENA has successfully bucked the trend and rose nearly 10% at the beginning of this week. What caused ENA to perform well? Is its upward trend sustainable?
The ENA/BTC trading pair established its local bottom last week, and Ethena's head of growth tweeted that important information will be released in the next few days.
After community members preemptively announced the news, the ENA/BTC trading pair saw a good increase on Monday, and then the official Twitter account of Ethena Labs announced on Tuesday that USDe will be integrated into the Bybit exchange, which was the fourth largest exchange in April in terms of futures trading volume. In the afternoon of the same day, ENA soared to $1, setting a new high since May.
The partnership will support spot USDe trading pairs and allow Bybit users to use USDe as perpetual trading collateral, enabling them to achieve greater capital efficiency by offsetting most of their funding payments. In addition, users will be able to increase their returns by providing USDe to Bybit earning products.
If Bybit receives good feedback after supporting USDe trading pairs, other exchanges may also soon support USDe trading pairs, and may eventually compete with stablecoins such as USDT and USDC.
For Ethena to succeed, the demand for long leverage must remain high to keep the funding rate high, as this is where most of the project's revenue comes from. In addition, a reduction in the funding rate will reduce the returns of holders, and when the interest rate becomes negative, Ethena will suffer.
While bull-run-driven high fees support USDe adoption in early 2024, the token’s supply has been falling since April 13, when the cryptocurrency market fell into a downward trend.
The continued decline in fees suggests that the market’s frenzy has come to a temporary end, and while USDe exchange integrations could help boost demand for the token, they will have a hard time saving the product if returns decline further.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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