- Ben Lilly claims ETH is “heavily suppressed” in the crypto market.
- Ethena’s transparency dashboard aligns with DeFi Llama’s TVL data.
- Over $3 billion of TVL on DeFi Llama is actually in BTC while major CEXs hold significant ETH assets through Ethena.
Ben Lilly recently stirred up the crypto community with a bold claim that Ethereum (ETH) is “heavily suppressed” in the market.
He also introduced the concept of “Ethena” as a potential factor influencing ETH’s price movements, providing key insights through data analysis and DeFi metrics.
One major factor affecting ETH’s price is the significant role of centralized exchanges (CEXs) holding substantial ETH assets through Ethena, which directly influences price fluctuations.
TVL and Ethena’s Transparency Dashboard
Lilly pointed out that DeFi Llama reports a TVL of $5.9 billion, which is consistent with figures on Ethena’s transparency dashboard.
The fact that data was aligned in this way attracted a lot of people, as it gave the analysis an extra layer of credibility.
However, Lilly said that the TVL reported that DeFi Llama acts as a poor proxy for the amount of ETH sitting in the market.
Instead, he clarified that the TVL figures are how much the TVL is in ETH units, not the actual amount of total ETH holdings.
This matters because it alters how we should read the data and provides a more realistic view of how ETH is performing compared to other assets in the market.
BTC vs ETH: Misleading TVL Figures
Lilly says the way TVL is usually presented often leads people to be mistaken about how much ETH is being held or being traded.
The idea that when you flip from USD to ETH on DeFi Llama, it does not show you how much TVL is ETH.
Instead, it’s pricing TVL in ETH units. However, a large portion of the reported TVL is linked to Bitcoin (BTC) rather than ETH.
What this does is change the entire picture of how much sway ETH holds in the market, as it turns out $3 billion of the reported TLV is in BTC alone.
This new understanding casts doubt on the belief that ETH is being heavily suppressed in comparison to BTC, suggesting that BTC may hold more market influence than previously assumed.
The Ratio Between TVL and Market Capitalization
To further illustrate this point, Lilly examined the ratio of TVL in Ethena to Bitcoin and Ethereum’s market capitalization.
He pointed out that there’s a large difference between ETH’s total market cap of $436 billion and Bitcoin’s $1.9 trillion market cap, but the effect of TVL on ETH price is much larger.
For one, this shows that ETH’s price movements will be influenced by a larger force than usual, and it could also mean that it has to do with the inside mechanism for Ethena.
Data shows we are seeing similar suppression in ETH’s price, even with a smaller market cap, and the price is more susceptible to external forces, which further amplifies the perceived suppression.
ETH Holdings by Centralized Exchanges (CEXs)
In his analysis also, Lilly looked closely at major centralized exchanges (CEXs) that hold sizeable amounts of Ethena assets, including Binance, ByBit, and OKx.
And he noted that for several periods between February 2020 and December 2020, their ETH holdings also increased significantly.
Crypto assets on these exchanges grew by $2.1 billion from February to April 2020 with Ethena. This figure was a total of $2.5 billion by the end of 2020.
According to Lilly, this could also be a result of the increase in asset prices during these periods that increased the total TVL reported by DeFi Llama.
But he also warned it’s something of a reflex in TVL, partly dependent on asset prices themselves and not necessarily the whole story.
This shows how Ethena’s transparency dashboard is a crucial component in explaining the larger dynamics of ETH price moves.
The data on the dashboard helps explain the inflows into Ethena’s assets and how ETH inflows affect the price of Ethereum in the market.
By analyzing inflows during certain periods, it becomes clear what contribution the leading players of the crypto market make to ETH’s price and, in fact, they do it, at least not with a wider audience to see.
While these data points cannot explain by themselves the so-called “suppression” of ETH, they provide useful information into the forces shaping ETH’s market behavior, pointing to a more complex narrative than what is typically portrayed in standard market analyses.