DeFi
Aave deposits exceed $19.5 billion as traders bet on Ethereum – DL News
- The amount of crypto deposited on Aave hit a two-year high on Wednesday.
- Traders are rushing to take advantage of news that spot Ether ETFs are likely.
Crypto deposited into Aave, the largest decentralized lending protocol, is approaching a level not seen since the crash of Terra’s UST stablecoin two years ago.
The value of crypto deposited in Aave surpassed $19.5 billion on Wednesday, its highest figure since May 9, 2022, according to data from DefiLlama.
It’s the latest sign that DeFi has recovered from 2022’s myriad cataclysms that wiped out two-thirds of the industry’s market value.
Traders are rushing to Aave as they expect SEC to approve Ether spot ETFs.
It’s also a sign that crypto traders are rushing to Ether after ETF watchers said they expect the Securities and Exchange Commission to approve Ether spot exchange-traded funds tomorrow.
Earlier this year, the launch of spot Bitcoin ETFs propelled Bitcoin to new heights.
Ether peaked in November 2021 at $4,800.
Ether was recently trading at $3,763, down less than 1% in the last 24 hours.
Lending protocols like Aave help traders gain leverage, a way to increase their gains – and losses.
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It’s built on a dozen blockchains, but around 90% of the monetary value of deposits is on Ethereum and its layer 2 blockchains, such as Arbitrum.
On Monday, Bloomberg Intelligence analysts James Seyffart and Eric Balchunas amended their chances of the SEC approving Ether spot ETFs from 25% to 75%, causing the cryptocurrency’s value to rise by 20%.
Since then, traders have flocked to Aave.
In the seven days leading up to Bloomberg analysts’ announcement, more than $450 million worth of cryptocurrency was injected into Aave V3, the latest iteration of the protocol.
As of Monday, crypto worth over $517 million has been deposited into V3.
The amount of crypto borrowed on Aave surpassed $6.7 billion on Wednesday, its highest level since May 9, 2022.
Aleks Gilbert is a DeFi correspondent based in New York. Do you have any advice? You can contact him at aleks@dlnews.com.