Economy
Can AI Startups Predict Ethereum’s Price Rise? DeFi Trading Gets Smarter
Ethereum has emerged as the dominant platform for Decentralized Finance (DeFi). Unlike traditional finance controlled by central institutions, DeFi uses blockchain technology to create a peer-to-peer financial system.
Ethereum’s programmable capabilities allow developers to build innovative financial applications, such as lending platforms, decentralized exchanges (DEXs), and yield farming protocols.
This has promoted the growth of DeFi, with the total value locked (TVL) in DeFi applications reaching record highs in recent years.
The year 2024 is shaping up to be a pivotal year for Ethereum. Experts predict a huge rise in Ethereum’s network activity and revenue, potentially doubling to $5 billion.
This bullish sentiment is further bolstered by the highly anticipated EIP-4844 upgrade, which aims to drastically reduce transaction costs and make the network more accessible to mainstream users.
While Ethereum forms the technological foundation, a new wave of innovation is surging in the DeFi space – AI startups. These young companies are harnessing the power of artificial intelligence to develop solutions that can transform DeFi trading.
With Ethereum’s price and network poised for significant growth, can AI startups predict Ethereum’s price rise and contribute to a smarter DeFi trading industry? Read on to learn!
Ethereum’s Revenue Surge and EIP-4844
Ethereum’s future appears bright, with analysts at Bitwise Asset Management predicting a staggering doubling of its revenue to $5 billion in 2024. This impressive growth projection reflects the increasing adoption and usage of DeFi applications built on the Ethereum network.
As DeFi protocols continue to attract users, the fees generated from transactions on the Ethereum blockchain will naturally rise.
A significant catalyst for this growth is the upcoming EIP-4844 upgrade, expected to be implemented later in 2024. This much-anticipated upgrade aims to address one of Ethereum’s biggest challenges – high transaction fees (gas fees).
EIP-4844 introduces a new transaction type called “blob-carrying transactions,” which store less critical data off-chain, significantly reducing the cost of transactions on the Ethereum network.
According to estimates, they range from 5-10x cheaper to 40-100x cheaper depending on the rollup type, which is paving the way for wider user adoption and further DeFi innovation.
DeFi’s Obstacles
Despite its rapid growth, DeFi still faces hurdles that hinder mainstream adoption. One of the biggest roadblocks is the issue of high transaction fees. On the Ethereum network, gas fees can fluctuate significantly depending on network congestion.
These fees can be a major deterrent for casual users and smaller transactions, making DeFi seem inaccessible and expensive.
Another challenge is the complexity of DeFi applications. Using DeFi platforms often requires a certain level of technical knowledge and familiarity with cryptocurrency concepts.
The user interfaces of many DeFi protocols can be intimidating for newcomers, hindering wider participation in the DeFi ecosystem.
The Position Of AI In DeFi Trading
The burgeoning field of AI startups is rapidly transforming the industry of DeFi trading. These innovative companies are developing sophisticated AI-powered solutions that address key challenges and open new possibilities for participants in the DeFi ecosystem.
Price Prediction Models
One of the most intriguing applications of AI in DeFi is the development of price-prediction models. These models leverage machine learning algorithms to analyze vast amounts of historical market data, including price movements, trading volumes, and on-chain activity.
AI models attempt to forecast future price movements for assets like Ethereum by identifying patterns and trends within this data.
While not foolproof, AI-powered price predictions can be a valuable tool for DeFi traders by providing insights and potentially mitigating risk.
For instance, a price prediction model might indicate a potential surge in Ethereum’s price, prompting a trader to buy before the price increase occurs.
Automated Trading Strategies
Human emotions can often cloud judgment and lead to irrational trading decisions. AI-powered automated trading strategies aim to address this by removing human bias from the equation.
These strategies are pre-programmed sets of rules that guide trading activities based on specific market conditions.
For example, an automated trading strategy could be configured to buy Ethereum if the price falls below a certain threshold or sell it if it reaches a pre-defined profit target.
This approach allows traders to automate repetitive tasks and potentially improve their trading performance by adhering to a disciplined strategy.
Sentiment Analysis
Social media and news outlets are a constant stream of information that can influence market sentiment. AI startups are developing tools that utilize sentiment analysis to gauge the overall market mood towards Ethereum and other cryptocurrencies.
These tools analyze text data from social media posts, news articles, and online forums to identify positive, negative, or neutral sentiment toward Ethereum.
By understanding the prevailing market sentiment, traders can make more informed decisions about their DeFi investments.
The Impact On DeFi Trading
AI-powered trading offers a multitude of benefits for DeFi users, fundamentally transforming the trading experience. Firstly, AI automates repetitive tasks such as order execution and market monitoring, freeing up valuable time for users to focus on strategic analysis and portfolio management.
This increased efficiency allows traders to react more quickly to market opportunities and make informed decisions.
Secondly, AI-powered risk management tools can help users mitigate risk by automatically implementing stop-loss orders and other safeguards. This data-driven approach helps to remove emotional biases from trading decisions, potentially leading to more disciplined and profitable outcomes.
Finally, AI has the potential to democratize DeFi trading by making it more accessible to new users. User-friendly interfaces and automated strategies can simplify the complexities of DeFi, attracting those with less technical knowledge and fostering wider participation in the DeFi ecosystem.
Can AI Predict Ethereum’s Price Rise?
AI-based price prediction models hold immense potential, but it’s important to acknowledge their limitations. The cryptocurrency market remains inherently volatile, susceptible to unforeseen events and external factors that can disrupt even the most sophisticated AI models.
Additionally, AI predictions themselves can influence market behavior, potentially creating a self-fulfilling prophecy.
Therefore, AI should be viewed as a valuable tool for informed decision-making, not a guaranteed crystal ball for predicting Ethereum’s future price movements.
Wrapping Up
As Ethereum’s network activity and revenue surge, AI startups emerge as a powerful force in DeFi trading. These companies are developing innovative solutions like bitcoin pro air that utilize AI to predict price movements, automate trading strategies, and analyze market sentiment.
This confluence of AI and DeFi holds immense promise for the future. AI can facilitate DeFi trading, reduce risks associated with emotional decision-making, and make the DeFi ecosystem more accessible to a broader range of users.
As AI technology continues to evolve and integrate further with DeFi, we can expect even more groundbreaking advancements that will reshape the landscape of decentralized finance.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
By Adedapo Adesanya
The Naira appreciated against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N14.79 or 0.9 per cent to trade at N1,534.50/$1 compared with the preceding day’s N1,549.29/$1 on Thursday, December 12.
The strengthening of the domestic currency during the trading session was influenced by the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN).
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN; publication of real-time prices and buy-sell orders data from this system has lent support to the Naira at the official market.
Equally, the local currency improved its value against the British Pound Sterling by N3.91 to wrap the session at N1,954.77/£1 compared with the previous day’s N1,958.65/£1 and against the Euro, the Nigerian currency gained N2.25 to sell for N1,610.41/€1 versus N1,612.66/€1.
However, in the black market, the Naira crashed further against the US Dollar on Thursday by N10 to quote at N1,680/$1 compared with Wednesday’s closing rate of N1,670/$1.
Meanwhile, the cryptocurrency market majorly corrected after earlier gains as US President-elect Donald Trump reiterated his ambition to embrace crypto assets, but a bond market rout dragged risk assets lower.
Mr Trump said, “We’re going to do something great with crypto” while ringing the opening bell at the New York Stock Exchange, reiterating his ambition to embrace digital assets in the world’s largest economy and create a strategic bitcoin reserve.
Alongside, the European Central Bank trimmed its benchmark interest rates by 25 basis points and in its dovish policy statement hinted that more rate cuts were likely to happen.
The biggest loss was made by Cardano (ADA), which fell by 4.9 per cent to trade at $1.10, followed by Ripple (XRP), which slid by 4.1 per cent to $2.33 and Dogecoin (DOGE) recorded a value depreciation of 2.9 per cent to sell at $0.4064.
Further, Solana (SOL) slumped by 1.8 per cent to $225.89, Binance Coin (BNB) slipped by 1.3 per cent to $746.92, Bitcoin (BTC) declined by 0.6 per cent to $99,998.18, Ethereum (ETH) crumbled by 0.5 per cent to $3,909.43, and Litecoin (LTC) dipped by 0.3 per cent to $121.52, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market slumped on Thursday, pressured by an expected increase in supply, supported by rising expectations of a Federal Reserve interest rate cut.
The International Energy Agency (EIA) made a slight upward revision to its demand outlook for next year but still expected the oil market to be comfortably supplied, with Brent crude futures losing 11 cents or 0.15 per cent to trade at $73.41 per barrel and the US West Texas Intermediate (WTI) crude futures declining by 27 cents or 0.38 per cent to finish at $70.02 per barrel.
The IEA in its monthly oil market report increased its 2025 global oil demand growth forecast to 1.1 million barrels per day from 990,000 barrels per day last month, largely in Asian countries due to the impact of China’s recent stimulus measures.
At the same time, the IEA expects nations not in the Organisation of the Petroleum Exporting Countries and Allies (OPEC+) group to boost supply by about 1.5 million barrels per day next year, driven by the US, Canada, Guyana, Brazil and Argentina – more than the rate of demand growth.
On Wednesday, OPEC cut its demand growth forecast for 2024 for the fifth straight month.
The IEA said that, even excluding the return to higher output quotas, its current outlook is to a 950,000 barrels per day supply overhang next year, which is almost 1 per cent of the world’s supply.
The Paris-based agency said this would rise to 1.4 million barrels per day if OPEC+ goes ahead with its plan to start unwinding cuts from the end of next March.
Next year’s surplus could make it harder for OPEC+ to bring back production. The hike was earlier due to start in October 2024, but OPEC+ has delayed it amid falling prices.
Meanwhile, inflation rose slightly in November increasing the possibility of a US Federal Reserve rates cut again as the data fed optimism about economic growth and energy demand.
Support also came as crude imports in China grew annually for the first time in seven months in November, up more than 14 per cent from a year earlier.
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