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How High Can Lido Crypto Run From Here?

·3 min read
Big Bitcoin logo.
Big Bitcoin logo.

Written by Chris MacDonald at The Motley Fool Canada

Lido DAO (CRYPTO:LDO) is a rather interesting project that has gained some serious momentum of late. As a liquid staking solution for Ethereum (CRYPTO:ETH) and other blockchains, Lido has been a big winner from anticipation around Ethereum’s upcoming merge, ETH 2.0.

As the world of DeFi continues to grow, and Ethereum plays a central role in this growth, more investors want to understand what will drive Etheruem forward. Lido happens to have a stake in this growth, over the short-to-longer term.

Let’s dive into how high Lido can potentially run from here.

What’s been driving Lido higher?

Lido’s price action over the past month has been extremely bullish. Trading around $0.70 per token a month ago, Lido’s LDO token has surged to $2.50 at the time of writing. This move of more than 250% in a month is noteworthy, for sure.

Most of this move higher in LDO is tied to news a little more than three weeks ago that Ethereum will undertake its highly anticipated merge on September 19. This merge will transform Ethereum’s current proof-of-work consensus mechanism to proof-of-stake, reducing the amount of power needed to validate blocks and secure the blockchain.

This merge will also provide those currently staking on platforms such as Lido with a more accurate window of when they will be able to “cash out” their staked Ether (ETH). With uncertainty around the merge date, many investors appear to have been wary of locking in their tokens for an unspecified period of time. This new deadline changes all that, and provides more demand for Lido’s liquid staking offering.

More bullish updates

Interestingly, the news around Ethereum’s upcoming merge is one of a few catalysts that have been announced in recent weeks for Lido. Cryptocurrency exchange FTX has also announced LDO will be listed on its platform. More listings on various exchanges improves the liquidity of tokens, and is generally seen as a bullish catalyst.

Additionally, Lido has recently announced plans to expand its staking services from Layer-1 networks such as Ethereum, to other Layer-2 networks built on top of Etheruem. Thus, those looking for some sort of growth from Lido have a lot to like about how this project is moving forward.

Bottomline

Indeed, liquid staking provides investors with a number of potentially lucrative benefits. Lido DAO, as a liquid staking protocol, enables investors to earn yield on their Ethereum holdings, without locking in tokens directly, receiving stETH in exchange for their Ethereum, which can be traded on the open market.

With a ‘hard’ merge date, and other exciting catalysts, Lido certainly has the potential to run higher from here. How much higher depends on a number of factors, including the macro environment. However, with sentiment taking a bullish tone of late, Lido could be a token investors want to watch, at least over the near- to medium-term, for a continuation rally.

The post How High Can Lido Crypto Run From Here? appeared first on The Motley Fool Canada.

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Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Lido DAO.

2022