A prominent whale investor, leveraging revolving loans, recently expanded their long position on AAVE by purchasing 11,605 tokens at $258 each, funded by an additional 3 million USDT borrowed nine hours ago.
This move brings their total borrowed amount since October to $8.83 million, used to acquire 87,454 AAVE at an average price of $166. With AAVE’s price now at $270, the investor’s floating profit has surged to an impressive $9.22 million.
AAVE’s growth trajectory suggests more upside potential, fueled by several bullish factors:
1. Increased Lending Protocol Demand in Bull Markets
During this year’s bull market, the demand for lending protocols like AAVE has surged. AAVE’s total value locked (TVL) now stands at approximately $20 billion (5.8 million ETH), a two-fold increase since the cycle began. In comparison, Uniswap’s TVL in ETH terms remains stable at 1.7 million ETH, underscoring the significant advantage lending protocols gain in bull markets. With the market momentum intact, AAVE’s TVL metrics are likely to climb further.
2. Favorable Market Cap to Fully Diluted Value (MC/FDV) Ratio
Among Ethereum-based DeFi protocols, AAVE boasts an MC/FDV ratio of 0.94, the second highest after MakerDAO’s 0.97. This low ratio indicates minimal selling pressure from token unlocks, making AAVE an attractive investment option.
3. Fee Switch Potential and High Fee/FDV Ratio
AAVE’s potential implementation of a Fee Switch could enhance token utility by sharing protocol revenues with holders. This development may act as a strong market catalyst. Moreover, AAVE’s Fee/FDV ratio is second only to Venus Protocol on BNB Chain, suggesting higher prospective interest payouts for holders compared to other platforms.
As the bull market continues, AAVE appears poised for substantial gains, driven by strong fundamentals and investor confidence.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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