- The amount of crypto deposited on Aave hit a two-year high Wednesday.
- Traders are rushing to take advantage of news that spot Ether ETFs are likely.
Crypto deposited in Aave, the largest decentralised 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 topped $19.5 billion Wednesday, its highest figure since May 9, 2022, according to DefiLlama data.
It’s the latest sign that DeFi has recovered from the myriad cataclysms of 2022 that wiped two-thirds of the industry’s market value.
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 spot Ether exchange-traded funds tomorrow.
Earlier this year, the launch of spot Bitcoin ETFs sent Bitcoin soaring to new heights.
Ether peaked in November 2021 at $4,800.
Ether was recently trading at $3,763, down less than 1% in the past 24 hours.
Lending protocols like Aave help traders obtain leverage, a way to supercharge their gains — and their losses.
It is built on top of a dozen blockchains, but roughly 90% of the dollar value of deposits are on Ethereum and its layer 2 blockchains, such as Arbitrum.
On Monday, Bloomberg Intelligence analysts James Seyffart and Eric Balchunas amended their odds of the SEC approval of spot Ether ETFs to 75% from 25%, prompting a 20% jump in the cryptocurrency’s value.
Traders have rushed to Aave in the days since.
In the seven days preceding the Bloomberg analysts’ announcement, more than $450 million in crypto flowed into Aave V3, the latest iteration of the protocol.
Since Monday, crypto worth more than $517 million has been deposited in V3.
The amount of crypto borrowed on Aave topped $6.7 billion Wednesday, its highest level since May 9, 2022.
Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? You can contact him at aleks@dlnews.com.
