Ethereum around $2,000 as network activity surges

Over the last week, Ether's price has risen by 2.5 per cent, while the total market cap has increased by 0.5 per cent

Ether is trading marginally higher on November 23, maintaining support above the $2,000 level after briefly retesting $1,930 on November 21. Over the last week, Ether's price has risen by 2.5 per cent, while the total market cap has increased by 0.5 per cent. This uptrend can be attributed to improved DApps metrics, higher protocol fees, and Ethereum's dominance in the NFT market.

To evaluate whether Ether can maintain its $2,000 price point, one must consider the fallout of Binance's recent regulatory challenges after its plea deal with the U.S. Department of Justice.

Binance leads in Ether spot trading volume, accounting for 30 per cent of ETH futures contracts' open interest. The closure of Binance's $2.35 billion worth of ETH derivatives contracts within a short period could have significant repercussions. In spite of initial analyses showing minimal changes in spreads and liquidity, Binance witnessed net outflows of $1.53 billion between November 21 and November 23, as reported by DefiLlama.

The regulatory landscape presents risks and opportunities. Some view Binance's actions as proof of sufficient reserves, while others are worried about the $4.3 billion fine facing Binance and its former CEO, Changpeng Zhao. Notably, Bitcoin advocate Luke Broyles advised followers to withdraw their coins from exchanges.

Even if Binance continues operations and protects all client assets, the long-term impact of full compliance and heightened scrutiny remain uncertain. Moreover, the relationship between Binance and stablecoin issuers such as Tether, TrueUSD and Binance USD raises further questions.

Government agencies gaining access to previously undisclosed money laundering through Binance, including fiat payment gateways and banking partners, increases the possibility of regulatory actions against stablecoin providers. This news has been especially detrimental to Ethereum, given Binance's status as the third-biggest ETH staker, with $1.24 billion in deposits, as per DefiLlama.

Nevertheless, recent regulatory developments also offer some positives. Binance's move towards full compliance reduces the risk associated with unregulated exchanges, making it more likely for the U.S. SEC to approve spot ETF instruments for crypto currencies. Major industry mutual fund managers, like BlackRock and Fidelity, have recently expressed interest in launching Ether spot-based exchange-traded funds.

Moreover, the Securities and Exchange Commission's lawsuit against Kraken on November 20, which lists 16 crypto currencies as securities, excludes Ether (ETH). This exclusion reduces the possibility of regulatory actions against the Ethereum Foundation and entities involved in the 2015 ICO, providing hope amidst regulatory uncertainties.