Nfts
NFT ETH in the banana zone
Last month, Real Vision co-founder and CEO Raoul Pal said crypto appears to be on the verge of banana zonewhere majors and altcoins rally strongly as new all-time highs (ATH) are reached.
This banana patch outlook became even more important this week as the price of ETH surged to +$3,700 on news that the U.S. Securities and Exchange Commission (SEC) appears ready to approve its first ETH ETFs.
With ETH now 24% off its previous all-time high of $4,878, and after seeing $75 billion in inflows yesterday on ETF enthusiasm alone, it’s not a stretch to assume that an approval ETF official release in the coming days could propel ETH through its previous ATH and into price discovery mode.
For what? Like DCinvestor recently underlinesa supply-side crisis appears to be brewing around ETH.
Imagine the buying pressure from large capital inflows on Wall Street, which could be considerable to say the least.
Then imagine this push against the fact that Ethereum is currently only issuing around 2.5k ETH per day, and sometimes that issuance can be entirely compensated by burned expensesand how there is currently a ton of ETH essentially locked up in staking and various applications and layer 2 (L2).
via X
These factors create a perfect storm for a dramatic supply shock. As more institutional investors and retail buyers rush to gain exposure to ETH, the limited supply in circulation is reportedly struggling to meet this demand. This dynamic could propel ETH into uncharted territory, pushing prices well beyond previous ATHs.
For those of us stacking ETH, this would be great: introduce the banana zone squared. But what else should we pay attention to?
For his part, the banana king himself, Raoul Pal, believes that next NFT bull run will increase once ETH crosses its previous ATH.
Personally, I agree, because we’ve seen this happen before. When ETH rallied strongly in 2021, people also rallied strongly about things you could do with your ETH, like NFTs.
That said, if ETH really takes off in the coming weeks, it’s not out of the question that the price floors of, for example, major ETH NFT collections like CryptoPunks, Bored Apes, Pudgy Penguins, and Miladies will double or exceed. at the end of summer. If this happened, you would also undoubtedly see a resurgence of NFT applications such as NFTfi platforms.
Of course I thought the Runes catalyze the Ordinals ecosystemand while there are surely still synergies to come here, this catalyst has yet to bear fruit.
And of course, I think it’s always good to anticipate the unexpected. Perhaps the arrival of ETH ETFs won’t be a huge catalyst for the ETH NFT scene. Yet the arrival of Runes and the arrival of ETH ETFs are very different beasts.
Runes haven’t started the next leg of the crypto bull market, but ETH ETFs appear poised to do so. And the potential crisis on the supply side of ETH has no analogues in Runes.
If the price of ETH reaches new highs, holders will feel more risk-averse and a sizable number of them will bid on the NFTs they were considering during the last bear market. Additionally, NFT projects of all stripes have better UX than just a few years ago, so the ecosystem is now more fertile.
Another angle to consider is that new bullish momentum in ETH and ETH NFTs would likely spur a new wave of innovation and experimentation in the NFT space, from crosschain experiments to gaming and beyond.
Anyway, then? We may be on the cusp of crypto’s next transformative period, where NFTs and their use cases arise once again. Stay alert and prepare yourself, because things could go bananas soon…