Could Ethena Coin’s Price Hit $10?
Ethena Labs’ DeFi project, Ethena coin (ENA), has been attracting attention from investors, analysts, and traders alike. The project has garnered significant interest due to its unique approach to its stablecoin offering, USDe. Now, the team has announced the launch of an airdrop for its ENA token.
Within 24 hours of its launch, the ENA coin price experienced a significant spike, surging by over 64% to reach a daily high of nearly $0.93 on April 3. It is now on the brink of surpassing the $1 price level, which is often considered a crucial psychological resistance.
The project’s Total Value Locked (TVL) has also seen remarkable growth, increasing by nearly 2,088% Year-to-Date in 2024, as per DeFiLlama data. This highlights the steady growth of the Ethena Labs blockchain project.
Ethena has achieved several milestones since its launch, ensuring a consistent growth rate. For instance, the DeFi platform successfully raised $14 million in February 2024 from prominent crypto venture capitalists, including Dragonfly and Arthur Hayes’ Maelstrom Fund.
Arthur Hayes, the founder of BitMEX, has shown immense optimism for the ENA coin, predicting a price target of $10 for the Ethena token. Hayes believes that despite the current bearish market, the ENA price has exhibited significant growth and is likely to rally even stronger when the market turns bullish.
Although Ethena Labs’ promise of over 27% yields in USDe has raised eyebrows, the ENA crypto developers have clarified that their stablecoin operates on a fundamentally different model than UST. They ensure high yields through collateralization with staked Ethereum, delta hedging, and yield generation. This backing with staked Ethereum provides stability to their stablecoin offering.
To mitigate volatility, the Ethena token team takes short positions on ETH through centralized exchanges, effectively offsetting potential losses from fluctuations in staked ETH prices.
Despite the bullish sentiment from Hayes and other traders, reaching the $10 price level for the ENA coin may prove to be a challenge, especially in the near future.
One of the primary challenges is the impending airdrop of the ENA token. Airdrops often lead to bearish market sentiment as recipients tend to sell off their received tokens for profit. This could exert significant downward pressure on the ENA crypto token price if more traders follow suit.
Additionally, some traders have highlighted potential vulnerabilities within Ethena. They suggest that the project could face disruptions if there is a large-scale withdrawal of assets. In bearish markets, minor losses can trigger mass withdrawals, potentially stressing liquidity and causing the eUSD stablecoin to depeg.
However, one trader named ‘Ice’ has proposed a solution to prevent depegging and maintain stability. They suggest that Ethena Labs secure commitments of over $10 billion for buying and redeeming eUSD at depeg. While this may stabilize eUSD, it could inadvertently impact Ethereum’s value in a bear market.
In conclusion, it is challenging to predict whether the Ethena coin price will reach $10, given the inherent volatility of crypto assets. However, it is evident that the ENA price will not touch $10 unless it survives the bearish sell-off triggered by the airdrop event.
