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HomeCryptoSolana's rally is fueled by memecoin and DeFi activity, Ether's Implied Volatility...

Solana’s rally is fueled by memecoin and DeFi activity, Ether’s Implied Volatility surpasses Bitcoin

Solana’s recent continued price increase is largely driven by memecoin trading on its network, according to the founder of a Solana-based decentralized exchange.

Zeta Markets founder Tristan Frizza said the token’s increase in value was largely driven by an increase in memecoin trading activity on the Solana network.

“Memecoin has definitely become an important factor driving activity on Solana. Beyond speculation, this also demonstrates Solana’s ability to handle high transaction volumes at low costs, making it the ideal environment for retail users.” Frizza shared with The Block.

To illustrate this, Frizza pointed to on-chain metrics such as Solana’s total value locked (TVL) surpassing $4.9 billion. “This shows strong network activity, and the number of active users has also continued to increase, with monthly active addresses reaching a new high of 41.65 million in May,” Frizza added. .

Solana is up more than 5% in the past 24 hours and is currently trading at $175 at the time of writing, according to The Block’s price page.

Solana is driven by growth in DeFi

According to this week’s Bitfinex Alpha report, Solana’s DeFi ecosystem is experiencing growth, as demonstrated by its lending, liquidity staking, and perpetual markets.

“The resurgence of Solana is due to the advantages it offers over other blockchains in terms of transaction speed per second and scalability. Both Solana and Ethereum continue to grow, but Solana’s growth is notable, and although according to TVL, Solana is four places behind Ethereum, it is second in trading volume on non-exchanges. on-chain centralization, as more and more users find utility in its blockchain,” said Bitfinex analysts.

Ether has higher implied volatility than bitcoin

Topping the cryptocurrency market capitalization rankings, Ether is predicted to experience larger price fluctuations this month than bitcoin. According to QCP Capital analysts, the implied volatility of Ether (IV)* options is currently higher than that of bitcoin, suggesting that traders anticipate heightened price volatility for Ether, possibly due to Spot Ethereum ETFs coming soon.

“The bullish sentiment is likely to continue as the market awaits the launch of a spot Ether ETF to create new demand, with the options market certainly reflecting this, given Ether volatility [IV] still trading 15% above bitcoin volatility,” QCP Capital analysts said.

Andrew Melville, Head of Research at Block Scholes, observed that Ether’s price volatility has become more significant since mid-May compared to BTC, featuring the largest difference in volatility between the two. two tokens since the fall of FTX in November 2022.

“The rising premium tied to volatility reflects increased uncertainty especially in the short term, with potential updates to Ether ETF applications approaching. However, unlike the recent price surge, there is not much demand pushing Ether prices up rapidly. Overall, market sentiment appears cautiously optimistic, with similar short-term positions between both Ether and bitcoin,” Melville said.

*Implied volatility (IV), also known as implied volatility, is an index that measures the expected level of volatility of the underlying asset’s price in the future, implicitly understood from the price of options on the market. school. Implied volatility indicates the degree to which investors expect an asset price to fluctuate over a given period of time, typically expressed as a percentage and on an annual basis.

High implied volatility typically reflects market expectations of large future price movements, while low implied volatility indicates the market anticipates less volatility in asset prices. IV is an important factor in options pricing and helps investors evaluate the level of risk and opportunity in options trading.

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Thach Sanh

According to The Block

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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