Ethena (ENA) is gaining attention as Ethereum (ETH) holds above the $3,500 range with a bullish outlook. In the past few days, interest in ENA increased, with a recent purchase from Pantera Capital.
Interest in Ethena (ENA) grew as Ethereum (ETH) moved to a higher price range. The Ethena basis trade on ETH and its winning funding rate is benefitting from this scenario, raising demand for ENA token exposure.
Recently, Pantera Capital topped up its reserves, with another $8M ENA purchase. As noted by Nansen, Pantera turned into one of the biggest daily buyers of ENA, in addition to boosting its reserves in the past month.
.@PanteraCapital casually loading up $8m in $ENA in the last 24 hours.
They've been steadily stacking for the last three weeks. pic.twitter.com/mHHnEJeMMp
— Nansen 🧭 (@nansen_ai) November 29, 2024
The fund’s inflow into Ethena follows buying from crypto influencer Arthur Hayes, who rolled over $11.21M from ATH tokens into ENA. For Hayes, this is the second purchase since November 26, when he rolled over $2.8M into ENA.
Ethena gets boost from positive market outlook
The shift of highly visible buyers into ENA may be linked to the token’s long-term outlook, which depends on a bullish outlook for ETH. The whale buying is close to the initial funding of Ethena, which reached $25M in several rounds.
Sudden interest in the protocol also raised its daily fees, surpassing even the Solana ecosystem. Increased inflows into USDe boosted Ethena’s activity and fees. In the past 24 hours, the protocol produced $16M in fees, becoming one of the most active DeFi apps.
The Ethena protocol has been expanding its activity in the past six weeks, as reflected by the growth of its USDe stablecoin. The supply of USDe expanded from a low of 2.43B up to over 4.16B, suggesting more confidence in the market. In September, Ethena faced a temporary period of negative funding rate, cutting into its yield and causing it to diminish the supply of USDe.
The recent favorable market conditions allow Ethena to offer a yield of up to 29%. This has brought more holders to its yield-bearing stablecoin, in return expanding its supply aggressively.
ENA tokens trade near a one-month high
As a result of the sudden interest in the yield-bearing asset, ENA tokens also rallied to a one-month high. ENA traded at $0.74, with expectations of extending its rally or even breaking out into a new range. ENA only reached an all-time high at $1.46, setting expectations for a bigger rally.
ENA open interest is also at an all-time high at $346M, though lagging behind other DeFi tokens. The Ethena protocol locks in $4.17B in value, based on DeFi Llama statistics, which hinge on the minted USDe. The ENA token has a valuation of around $2B, lower than the protocol’s total locked liquidity. Ethena protocol also entered the top 10 of DeFi based on its value locked, getting ahead of Pendle.
The success of Ethena would depend on its ability to continue providing the promised yield. During favorable conditions, USDe may keep expanding, while mostly remaining staked for passive income. USDe has a limited spread to other DeFi protocols, calming the fears of contagion.
Recently, Bitget, one of the leading DEX for meme tokens, added new pairs against USDe. The pairs include BTC, ETH, and SOL, enjoying a no-fee trading promotion.
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