Ethena (ENA) Price Rises 7% as USDe Becomes Third-Largest Stablecoin
Ethena's native cryptocurrency ENA surged 7% in the last 24 hours, surpassing $0.90 with a market cap of $2.66 billion. Daily trading volume increased by 55%, exceeding $730 million, indicating strong bullish momentum. This price rally coincides with heightened demand for its USDe stablecoin.
Over the past week, ENA's price rose nearly 40%, and monthly gains reached 160%. The price movement is supported by significant whale activity, notably heavy accumulation by BitMEX co-founder Arthur Hayes.
Ethena's synthetic dollar USDe has become the fastest-growing USD-pegged stablecoin, with its market cap increasing 73% over the last 30 days to $4.77 billion. This positions it as the third-largest stablecoin, surpassing DAI's market cap of $4.71 billion. Ethena Labs co-founder and CEO Guy Young stated:
“We are beginning to now see the effects as USDe blackholes every stablecoin in DeFi while warping lending markets to a new base rate. However, it has become evident that DeFi is insufficiently sized at the moment to close the arb entirely and larger pools of capital are required. The next step for Ethena is plugging directly to $100b-1tn+ asset managers who can provide the capital required.”
Ethena's USDe Provides Highest Yield-Bearing
Market analysts indicate that USDe's rise is fueled by strong dynamics, driven by bullish sentiment and increasing demand for yield-bearing assets. Unlike USDT #USDT and USDC #USDC, which are primarily used for transactions, most USDe tokens are held for rewards, positioning USDe as a yield-generating asset.
The official website states that USDe holders can earn an annual percentage yield (APY) of 29%. Critics have compared Ethena’s model to the failed Terra-Luna project, which collapsed in May 2022 due to unsustainable growth strategies, leading to a major market downturn.
Despite these concerns, demand remains high, as evidenced by supply and borrow APR rates on Aave that significantly exceed those of USDT and USDC. Additionally, Ethena has partnered with on-chain derivatives platform Derive.xyz to enhance liquidity and foster growth for both platforms, involving multimillion-dollar investments announced on December 3.