NOIDA (CoinChapter.com)—The Ethena coin (ENA), a DeFi project from Ethena Labs, has drawn attention from investors, analysts, and traders. The project’s approach to its stablecoin offering, USDe, has generated significant interest. Now, the team has announced the launch of its ENA token’s airdrop.
ENA is the native token of the Ethena Labs blockchain project. The ENA coin price spiked by over 64% to reach a daily high of nearly $0.93 on April 3 within 24 hours of its launch.
The token is close to breaking past the $1 price level, often considered a psychologically vital resistance likely due to the lack of zeroes after the decimal (no offense, SHIB, DOGE, and others).
Furthermore, the DeFi project’s TVL has grown by nearly 2,088% YTD in 2024, highlighting the project’s growth, per DeFiLlama data.
Strategic Initiatives Powering Ethena Coin’s Growth
Since its launch, Ethena has achieved several milestones to ensure a steady growth rate. For instance, the DeFi platform successfully raised $14 million in Feb. 2024 from leading crypto venture capitals, including Dragonfly and Arthur Hayes’ Maelstrom Fund.
Hayes has been extremely bullish on the ENA coin, forecasting a $10 price target for the Ethena token. The BitMEX founder noted that ENA price has shown massive growth during a relatively bearish market, speculating that the Ethena Labs token would likely paint a stronger rally once the market turns bullish.
Interestingly, Ethena Labs’ promising over 27% yields in USDe raised some eyebrows, reminding traders of the Terra Luna days. However, the ENA crypto developers claimed that USDe operated on a fundamentally different model than UST.
According to company documentation, Ethena promises high yields through a combination of collateralization with staked Ethereum, delta hedging, and yield generation. Ethena Labs backs its stablecoin offering via staked Ethereum, providing a measure of stability.
Moreover, the Ethena token team mitigates volatility by taking short positions on ETH via centralized exchanges, which effectively offsets potential losses from fluctuations in staked ETH prices.
However, despite Hayes and other traders’ bullishness on the project, ENA coin reaching the $10 price level would be challenging, at least in the near future.
Ethena Labs Challenges
The first challenge before the ENA coin’s dream price of $10 is the token’s airdrop. Airdrops often turn out to be a bearish cue for a token since recipients look to book profits after receiving their pile.
For example, crypto trader CoinMamba stated that he plans to dump the ENA coins he would receive in the Ethena airdrop. As a result, the ENA crypto token price could face strong bearish pressure post-airdrop if more traders follow suit.
Furthermore, another crypto trader with the X username ‘Ice‘ highlighted some structural vulnerabilities of Ethena.
The trader highlighted that the Ethena coin could face significant disruptions in the event of a large-scale withdrawal of assets. Essentially, the Ethena token faces risks in bearish markets, where minor losses can trigger mass withdrawals that could stress liquidity and potentially cause eUSD to depeg.
However, Ice suggested a solution to prevent USDe de-pegging and maintaining stability. The trader suggested Ethena Labs secure $10 billion+ commitments for buying and redeeming eUSD at depeg. But, the move that stabilizes eUSD could inadvertently affect Ethereum’s value in a bear market
So, will the Ethena coin price reach $10? It is difficult to say since crypto assets are often volatile, but the ENA price will definitely not touch $10 unless it survives the bearish sell-off from the airdrop event.
