Ethereum Ecosystem Continues To Rally Into New Year-To-Date Highs

Multiple assets within the Ethereum ecosystem continue to post new year-to-date highs, pushing the combined capitalization of DeFi tokens near $100B for the first time since May 2022.

ETH changed hands for $3,125 earlier today, marking the asset's highest price since April 2022, according to CoinGecko. The latest price gains position Ether as the 25th strongest-performing asset among the top 100 cryptocurrencies by market cap.

ETH has now rallied 95% in the past four months, with many analysts tipping that Ethereum is poised to become the second cryptocurrency that U.S. investors can access through a spot exchange-traded fund (ETF) following the launch of 10 spot Bitcoin ETFs in January.

While Bitcoin ETF optimism drove massive gains for BTC over the past year — with Bitcoin also surging 92% since mid-October — Bitcoin has underperformed this past week. BTC is currently trading for $51,500 to sit at a seven-day loss of 1.2%, with many investors having turned their attention to Ethereum and its broader ecosystem.

The meteoric momentum of Worldcoin, the controversial digital identity project, is also showing no sign of slowing down. WLD last changed hands at an all-time of $8.74, marking a 266% jump in two weeks.

Ethereum scaling solutions outperform

Ethereum Layer 2s are among the week’s top-performing assets, with Mantle (MTN) posting a new all-time high above $0.90 on Sunday night. Mantle has enjoyed a sustained rally of 180% since October, coinciding with the network’s total value locked (TVL) surging from $90 to $722M over the same period, according to L2beat.

Mantle’s recent bullish performance was propelled by the impressive success of its liquid staking token, mETH, through which all Ether deposited onto its network accrue staking rewards for holders. mETH has ballooned to a $1.6B market cap since launching in December, positioning it as the 56th-largest cryptocurrency by market cap.

Metis (METIS) is up 22% this past week, with the token having quadrupled in just the past 10 weeks. The TVL of the Layer 2 has similarly rocketed in recent weeks, with the value of assets held on Metis jumping from $100M in mid-December to $861M today.

Gnosis (GNO), an Ethereum sidechain, has also enjoyed meteoric gains since October, rallying 273% to trade for $348 — a 22-month high. The TVL of Gnosis Chain TVL spiked from $82M to $272.6M over the same period.

Compound (COMP) and Convex (CVX), two of the top 15 DeFi dApps on Ethereum, were also among the week's top performers. COMP is testing $73 — its highest level since July, while CVX is trading for $4.90 for the first time in almost 10 months.

DeFi market cap tests $100B

The recent bullish market momentum has propelled DeFi assets to their highest level since May 2022, with DeFi tokens commanding a combined market cap of $97.5B. The TVL in DeFi protocols is also at a nearly 22-month high, currently sitting at $83.2B, excluding liquid staking projects.

However, Ether’s gains coupled with the rise of liquid staking have contributed heavily to the DeFi sector’s strong performance as of late.

StETH, Lido’s liquid staking token, accounts for 31.2% of DeFi's market cap. Including liquid staking tokens, DeFi TVl would sit at $131B — with stETH making up almost a quarter of the total.