Ethena’s native cryptocurrency, ENA, surged 25%, pushing its price to $0.35 with a market cap surpassing $920 million. This rise comes as Ethena challenges Tether’s dominance in the stablecoin market through its fast-growing USDe stablecoin. ENA’s daily trading volume also spiked by 180% to $233 million.
Ethena’s USDe Stablecoin Competes with Tether’s USDT
Since its launch, Ethena’s USDe stablecoin has become the fastest-growing decentralized finance (DeFi) project, reaching a $3 billion market cap within months. Crypto analyst Eugene Ng Ah Sio noted that Ethena is positioning USDe as a legitimate stablecoin competitor to Tether, making significant strides by integrating with leading players like BlockRock and Securitize.
USDe’s Unique Value Proposition and Yield
Ethena’s USDe stablecoin enables users to earn high yields—between 10-13% APY—by depositing $1 and receiving a delta-neutral position, split between staked ETH and an ETH short position. This structure makes USDe one of the highest-yielding stablecoins available. Ethena’s platform has attracted considerable interest, with TVL reaching $3.7 billion in just seven months.
By offering a 5-8% premium over the Federal Reserve’s fund rates, USDe has attracted yield-seeking investors. The integration of automatic yield-bearing capabilities by Bybit, a leading centralized exchange, further expands USDe’s appeal by providing frictionless access to stablecoin collateral.
Market Impact and Growth Potential
According to Eugene Ng Ah Sio, if just 20% of the $38.6 billion in stablecoins on centralized exchanges shifts to USDe, the stablecoin’s market could quadruple. Ethena’s UStb stablecoin, designed in collaboration with major financial players, will likely accelerate USDe’s adoption further.
With the Federal Reserve expected to reduce interest rates by up to 2 percentage points over the next two years, Ethena’s yield premium is likely to become even more attractive, driving more capital into USDe.
ENA Price Growth
Despite hitting a high of $1.45 earlier in 2024, ENA has experienced a steady recovery, with a 60% price gain over the last month. Analysts predict further growth as Ethena continues to expand its foothold in the stablecoin market.
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