According to Coingecko data, Ethereum is the second most popular cryptocurrency with a market valuation of $197 billion. As a result, the Ethereum network became popular with DeFi, as the largest protocols were constructed on top of it. This piqued the interest of digital payments giant Visa, which recently announced its support for Ethereum as a payment settlement method.
The move could set up another rally for Ethereum (ETH) which, at the time of writing, is up nearly 30% in the monthly time frame, based on data today, January 7th.
Ethereum To Be The Backbone Of Visa Crypto Venture
At StarkWare 2023, Visa’s VP and Crypto Head Cuy Sheffield announced the company’s testing of large transactions using the Ethereum blockchain. VisaNet, the company’s electronic payment network, is tied to Society of Worldwide Interbank Financial Telecommunication which is more commonly known as SWIFT.
This makes the system extremely efficient, with the network easily able to handle over 1,500-2,000 transactions per second. However, its interconnectedness with SWIFT has also limited the network’s ability to operate in the frequency that the company wants.
Image: Coinpedia
Sheffield said in the event that the company is testing how to accept payments in the form of stablecoins in the Ethereum network with the stablecoin of choice being USDC, the fifth largest cryptocurrency in terms of market cap.
This integration of blockchain technology alongside traditional finance tools can boost Visa’s vision of a cashless society.
At $1.6K, Will This Lead To Higher Highs?
As of writing, the bullish news for Ethereum has not reflected in the market at all with the prized altcoin continuing to ride the bearish wave. With its high correlation with Bitcoin and the current pain the top crypto is experiencing, we can expect the coin to perform worse in the short to medium term.
The current bearishness Ethereum is showing can lead to the bears testing the current support at $1,593, a crucial support that could lead to more long term pain if broken.
Even though the altcoin is considered by many to be a solid investment to diversify a cryptocurrency portfolio, the current slowdown of Ethereum has made it harder for investors to be optimistic of the long term prospect of the altcoin.
ETH total market cap at $199 billion on the daily chart | Chart: TradingView.com
With this in mind, investors and traders should be cautious of the current situation of ETH. However, Visa’s continuing usage of the Ethereum network could bring spotlight on the altcoin, further solidifying the token’s position as the top crypto asset in the market.
If the $1.5k support holds, we can expect a bullish climb in the medium to long term as more developments from Visa unfold.
Featured image from Livecoins