Decentral Block Post

Since May 12, Ether (ETH) price has been struggling to sustain its $1,800 support level as investors face pressures from a worsening crypto regulatory environment and the Ethereum network’s high gas fees. Also negatively impacting Ether’s price are 3 indicators signaling reduced demand for its decentralized applications (DApps) and a lack of leverage buying demand from professional traders.

Regulators signal their plan to further limit crypto intermediaries

According to court documents filed on May 15, the U.S. Securities Exchange Commission (SEC) has given a formal response in court in relation to Coinbase’s petition for clear crypto regulation. The SEC stated that any rulemaking may take years and that enforcement actions will continue in the meantime.

On May 16, the Economic and Financial Affairs Council of the European Union — comprising finance ministers of all member states — approved the highly-anticipated Markets in Crypto-Assets (MiCA) regulation, which will come into effect by mid-2024.

Some argue that the MiCA facilitates businesses growth in the region, while others focus on the privacy risks for personal users’ data, and the risks imposed for non-custodial solutions, including decentralized finance (DeFi) applications.

The drop in DApp deposits is concerning

Since May 12, Ether’s price has been struggling to sustain its $1,800 support level, as investors face pressures from a worsening crypto regulatory environment and the Ethereum network’s high gas fees. Also negatively impacting Ether’s (ETH) price are three indicators signaling reduced demand for its decentralized applications (DApps) and a lack of leverage buying demand from professional traders.

Regulators signal their plan to further limit crypto intermediaries

According to court documents filed on May 15, the United States Securities and Exchange Commission (SEC) has given a formal response in court in relation to Coinbase’s petition for clear crypto regulation. The SEC stated that any rulemaking may take years and that enforcement actions will continue in the meantime.

On May 16, the Economic and Financial Affairs Council of the European Union — comprising finance ministers of all member states — approved the highly anticipated Markets in Crypto-Assets (MiCA) regulation, which will come into effect by mid-2024.

Some argue that MiCA facilitates business growth in the region. Others focus on the privacy risks for personal users’ data and the risks imposed on non-custodial solutions, including decentralized finance applications.

The drop in DApp deposits is concerning

The price of Lido DAO (LDO) has rebounded to its three-week high of $2.21 as of May 16, up 40% when measured from its local low of $1.57, established four days ago.

This impressive double-digit recovery appeared in tandem with other top-ranking crypto assets, including Bitcoin (BTC) and Ether (ETH). However, LDO has greatly outperformed the broader crypto market (TOTAL) that's up only 4.5% since May 12.

But what are the reasons why Lido DAO is outperforming the rest of the cryptocurrency market right now? Let's take a closer look at the three biggest factors likely driving up LDO price.  

Ethereum depositors' return after Shapella

The LDO price recovery coincides with the net positive inflows into Ethereum's proof-of-stake (PoS) contract in recent days.

Lido DAO is primarily an Ethereum liquid staking platform. It enables users to pool their funds to become validators on Ethereum, thus bypassing the network's requirement of depositing at least 32 ETH.

The price of Lido DAO (LDO) has rebounded to its three-week high of $2.21 as of May 16, up 40% when measured from its local low of $1.57, established four days ago.

This impressive double-digit recovery appeared in tandem with other top-ranking crypto assets, including Bitcoin (BTC) and Ether (ETH). However, LDO has greatly outperformed the broader crypto market (TOTAL), which is up only 4.5% since May 12.

But what are the reasons why Lido DAO is outperforming the rest of the cryptocurrency market right now? Let’s take a closer look at the three biggest factors likely driving up LDO’s price.

Ether depositors’ return after Shapella

The LDO price recovery coincides with the net positive inflows into Ethereum’s proof-of-stake (PoS) contract in recent days.

Lido DAO is primarily an Ethereum liquid staking platform. It enables users to pool their funds to become validators on Ethereum, thus bypassing the network’s requirement of depositing at least 32 ETH.