Ethena's synthetic dollar cryptocurrency, USDe, has experienced a significant increase in market capitalization, surpassing $2.66 billion.
Ethena's synthetic dollar cryptocurrency, USDe, has experienced a significant increase in market capitalization, surpassing $2.66 billion, driven by growing enthusiasm surrounding the approval of spot Ethereum (ETH) exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). This surge in market cap follows a rise in Ethereum open interest across exchanges and an uptick in perpetual funding rates in the market.
On May 20, USDe's market cap hovered around $2.45 billion until Bloomberg ETF analysts, Eric Balchunas and Jeff Seyffart, raised the odds of the SEC approving a spot Ether ETF to 75%. Since then, USDe's market cap has grown by $100 million, representing a 4% increase in the past three days, reaching $2.66 billion currently. The boost in USDe's market cap can be attributed in part to the increased attractiveness of Ethena's USDe staking yield. Currently, USDe's staking yield stands at 37.2%, a significant rise from 27.55% on May 14, as indicated on Ethena's homepage.
On Thursday, the SEC approved all eight spot ETFs in a momentous decision that paves the way for Ethereum trading to take place on Wall Street. The approved funds include the Grayscale Ethereum Trust, Bitwise Ethereum ETF, iShares Ethereum Trust, VanEck Ethereum Trust, ARK/21 Shares Ethereum ETF, Invesco Galaxy Ethereum ETF, Fidelity Ethereum Fund, and Franklin Ethereum ETF.
According to Ethena Labs founder Guy Young, the rise in both open interest and funding rates is expected to provide substantial support for Ethena. Average perpetual funding rates across the market surged from less than 7% on May 20 to over 35% in under eight hours.
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