Three proofs for the price of Ethereum is because of speculation
1. Most of the transactions on Ethereum are to buy, sell, or swap ETH
The number of transactions that occur on the Ethereum blockchain and the price of Ethereum (ETH) are highly correlated. This is because most of the transactions on Ethereum are to buy, sell, or swap the ETH token. The charts below show the number of transactions on the Ethereum blockchain, the price, and market capitalization for ETH. The three charts are almost equivalent.
2. Only a small number of transactions are to do dApps
Messari.io shows the daily volume for ETH is approximately $211 million USD. State of the DApps shows the daily volume for ETH used by dApps is approximately $1 million USD. The top three used dApps are finance (DeFi), exchanges, and gambling.
3. The two most used dApps on the Ethereum blockchain are exchanges and finance
Below is the list from DappRadar of the top 20 dApps used on the Ethereum blockchain for the past seven days. DeFi is the most used dApp. DeFi occurs in the top five positions and occurs seven times in all. Exchange is the second most used dApp and occurs nine times.
From the data available, it appears that the price changes in ETH is from speculation/trading. This is because:
- most of the transactions on Ethereum are to buy, sell, or swap ETH
- only a small number of transactions on Ethereum are to do dApps
- the two most used dApps on the Ethereum blockchain are exchanges and finance.
While at this time, the price for ETH is mostly from speculative investment and not from the available dApps. But the cryptocurrency, blockchain, and DeFi ecosystem is new and its use in increasing. In time, it is thought that the price of ETH will correlate to the use of the dApps available on the Ethereum blockchain.