Why Isn’t $ETH Growing in This Cycle?

Ben Lilly, an analyst from Jarvis Labs, suggested that one reason Ethereum is lagging behind Bitcoin in this cycle could be related to none other than Ethena, your favorite DeFi platform.

Here’s a breakdown of the reasoning, supported by data and charts:

⬇️ When ETH starts to rise, funding rates increase, and TVL (Total Value Locked) flows into Ethena. This creates short pressure on ETH’s price, as illustrated by the ETH/BTC chart.

⬆️ When TVL exits Ethena, there’s a temporary rebound effect on the price.

Given Ethena's massive TVL, this effect impacts the ETH market more than BTC, due to the relative size differences between the two markets.

Additionally, the growth of investments in basis trading products such as Ethena, Resolv, and Midas mBASIS acts as a counterbalance to ETH price movements. As a result, Ethereum is evolving from a speculative asset into a more utility-driven and savings-oriented one.