Ethereum’s price driven by another NFT boom – but is it just money laundering?
ETH's monthly gains continue to mount, with the figure currently standing at a whopping 60%
- Over the course of Q2 2021, nearly 30% of Coinbase's transactions were Ethereum (ERC-20) based.
- Since the deployment of the London Hardfork, more than 23k ETH has been burned.
- Experts suggest that NFTs can be used by wealthy individuals to launder money as well as evade taxes.
After dipping below the $3k zone briefly, Ethereum has once again forged strong bullish support for itself, as is highlighted by the fact that over the last seven days the altcoin was able to record gains of nearly 11%. At press time, ETH is trading at $3,130.
Despite the recent volatility, Ethereum's fundamentals look to be quite positive, especially with $430 million in ETH options expiring later today. In this regard, derivatives data clearly shows that bulls are in control and may be looking to push the altcoin's value higher in the coming few days and weeks.
On the subject, Jack O'Holleran, the chief executive of ethereum app platform Skale Labs, opined that ETH's near term outlook seems to be incredibly strong, with the digital currency accounting for 26% of Coinbase's total trade volumes during Q2 2021, up 21% over first three months of the year. He added:
"This is in large part due to the growing momentum behind the ethereum ecosystem. We see this in the growth of ethereum addresses, up 65% just last quarter, as well as a 75% increase in the number of NFT on-chain transfers in the last seven days."
Ethereum's deflationary properties start to emerge
ETH's much awaited London hard fork which went live on Aug. 5 seems to have helped usher in a new era of operability for the altcoin before it makes its transition to a proof-of-stake (PoS) framework next year. As a quick recap, the upgrade (which contains the all important EIP 1559) seeks to not only help ease out the network's existing transactional bottlenecks but also make ETH deflationary in nature.
On the subject, a representative of blockchain software company ConsenSys recently highlighted that since the upgrade went live, a sizable 23k ETH has already been burned. "This is slowing the emission rate of new ETH (which is paid in the form of block rewards for new blocks added to the chain)," he added
Are NFTs being used to launder money illegally?
The NFT sector has exploded over the course of the last year or so. However, according to crypto analyst Mr Whale, there is also a "dark side" to this market. On the subject, he was quoted as saying that these novel tokens can be quite easily used by the wealthy to facilitate their money laundering and tax evasion activities, adding:
"Behind the facade of a bunch of bored rich dudes buying digital artwork at insanely high prices lays a sinister and twisted money laundering scheme for crypto's ultra-rich elites to make their illegal profits look legal."
What lies ahead?
Even though news surrounding Bitcoin ETFs continues to grab headlines globally, recently Delaware-based Kryptoin Investment Advisors submitted an application for an Ethereum exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). Therefore, it will be interesting to see how the future of the market plays out from here on end.
Disclosure: The author owns a range of cryptocurrencies at the time of writing