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👀 3 numbers you can't miss 📈

👀 3 numbers you can't miss 📈

PLUS: Did Tesla sell its bitcoin?

Alex M.
July 20, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: Ethereum nerds are gathering in Paris this week. And they’re talking about 3 ways to invest in the Ethereum ecosystem over the next year.

Let’s dig in.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

Let’s get the obvious out of the way: the crypto bear market has been absolutely brutal.

The Ethereum ecosystem hasn’t been immune from it.

Network revenue is down -33% year-on-year. Active addresses are down -6%.

And NFT volume on Ethereum is down a staggering -82%.

The floor price of Cryptopunks, the most prized NFT collection, is down -30%.

[Cryptopunks are the most likely to survive the bear market, btw.

Most other big collections are either a screaming buy today or beginning their inevitable decline to zero. Only time will tell].

But despite all this, 3 metrics continue to stand out and drive the Ethereum ecosystem higher…

1/ The amount of staked ETH keeps climbing 🚀

The Shapella upgrade in May enabled the withdrawal of staked ETH.

This brought the price of Ether to an 11-month high and paved the way for Ethereum to become the first true crypto bond (with ∼4% annual interest).

At the time, staked ETH represented 15% of all ETH in circulation. Today that number is over 20%.

staked Ether over time

This is great news for staking providers like Lido ($LDO). In aggregate, liquid staking providers’ share of staking increased 42% year-over-year:

This is a loss for centralized staking providers like Coinbase or Kraken but a win for decentralized players like Lido.

2/ The Total Value Locked in Ethereum scaling solutions (“L2s”) continues to grow.

Over $10 billion has been bridged over to Ethereum Layer 2s 🔥.

This means money is increasingly moving into solutions that make transactions on Ethereum faster and cheaper.

Arbitrum and Optimism are the most popular scaling protocols for Ethereum.

And after Ethereum’s next upgrade [Q4 ‘23], the fees on these protocols will fall even further, and speed will increase - which is hugely bullish.

Along with $ARB and $OP, Zksync is a strong contender in the race.

It doesn’t yet have a token, but you can potentially qualify for the airdrop by following the instructions we wrote about last month.

(we’ll be covering more airdrops soon)

3/ Ethereum continues to be deflationary.

Most people are worried about their currencies being inflated away.

Well, Ethereum does the opposite. Since Ethereum’s “Merge”, Ether has become deflationary - meaning there are fewer ETH being chased by more investors every day.

There are nearly 300,000 fewer ETH in circulation than last year.