The price of Ethereum fell in connection with the sale of 65,000 Ethereum on Uniswap. The massive crisis had a serious impact on the price of Ethereum. This has created an atmosphere of despair among investors.
This is the first time since 2020 that Ethereum mining has become unprofitable for customers connected to the regular electricity system. Ethereum price fell to $1,188 as energy price surged.
Due to rising electricity costs in New England, Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island, the price is higher than Ethereum returns for the same GPU. As a result, miners who spend more than $0.245 per kWh are now losing money.
Mining Ethereum with GPU has become unprofitable. At this stage, it is more cost-effective to buy Ethereum than to spend money on mining or energy.
Michael Edward Novogratz, CEO of Galaxy Investment Partners, has predicted that the price of Ethereum could drop to $1,000 and remain in the current decline. As Novogratz said at the Morgan Stanley meeting, Ethereum is closer to “bottom” than US stocks.
Lido Staking Dominance, Threat to Ethereum Price
Staking Ethereum for Protocol Lido has superseded Ethereum staking, putting the decentralized blockchain at risk of centralized attack. This can happen when networks merge and become a proof-of-stake network.
Ethereum Foundation researcher Danny Ryan presented this scenario in a post titled The Dangers of LSD (Lido Staking Dominance). Ryan advises all Ethereum stakeholders to create a threshold and cautions investors to minimize their exposure to the protocol due to the potential for centralized attacks.
According to data from Dune Analytics, Lido tops the ETH2 liquid staking with a 90.8% balance and over 4 million ETH stake. The Lido team claims that it employs 21 validators, and that centralized institutions do not provide this level of openness.
Ethereum Price Drops to $950 on Uniswap
On Monday, June 13th, the price of Ethereum on Uniswap fell to $950 in comparison to other cryptocurrency exchanges across multiple trading pairs. A significant wallet investor offloaded 65,000 Ethereum in exchange for the stablecoin, causing $100 million of liquidity pressure in the cryptocurrency.
The event saw the current price of Ethereum drop 20% compared to other cryptocurrency exchanges. Whales auctioned off large amounts of Ethereum due to liquidation risk on over-leveraged investments.
- 80 million DAI was borrowed using ETH.
- Whale contributed 96,700 ETH to the loan through the Maker DAO Maker/USD.
- 130,000 ETH position opened.
Because this was a highly leveraged position, whales hedged their exposure by selling over 65,000 Ethereum tokens on Uniswap and lowering the liquidation price.