Goerli ETH Briefly Traded Above $1.23 This Weekend
The recent decision by LayerZero to make Goerli ETH tradeable has some interesting consequences. The liquidity pool on Uniswap notes strong activity, pushing the gETH price pretty high. It is unfortunate as people seeking quick money continue to capitalize.
Goerli ETH Trading Spikes
It is well-known that Goerli ETH is a scarce asset. Although only used for the testnet, developers often struggle to perform high-level transactions due to low liquidity. As such, they have been looking for ways to increase access to gETH, although that is much easier said than done. LayerZero’s testnet bridge is a solution, enabling anyone to convert ETH to gETH and back.
However, that has also created a very peculiar scenario. Anyone with testnet currency is now incentivized to convert it to ETH. Trading between Goerli ETH and Wrapped Ether is possible through Uniswap or the testnet bridge. As such, the overall volume on Uniswap or Sushiswap will likely increase and lead to some volatility. Unfortunately, that isn’t beneficial to the testnet or its native asset, as this is not how things should go.
The overall value of gETH has shifted in recent days. For now, it holds its own at the $0.3 mark on Uniswap. That makes gETH still affordable, although things got out of control over the weekend. Following a buildup in trading, Goerli ETH peaked at $1.23 for a while. That is a lot of money to pay for testnet currency. As expected, that price couldn’t be sustained for too long. Some holders quickly liquidated positions and brought the value to $0.65 in the following hours.
There has been some more sell pressure on gETH in the past few hours. As a result, the price halved again, bringing it back to its “normal” value. However, it isn’t necessarily a good speculative investment, as the excitement surrounding gETH trading will dissipate quickly. In addition, there is only so much liquidity to go around. Once people sell and get their “free lunch,” things will likely enter sideways price momentum.
Big Trades Do Happen
Despite the limited liquidity of gETH, some people have tried to make good money from this newfound trading avenue. One user exchanged 150,000 gETH for 38.75 ETH over the weekend. That is a hefty $50,000 payday, although it is unclear why anyone would hold such amounts of Goerli ETH. This may be an old testnet miner cashing out or a developer selling back the liquidity they purchased earlier.
GM to this Chad pic.twitter.com/MNrLn9Ah8H
— Joe (Not @ ETHDenver) (@0x_Osprey) February 26, 2023
It is worth noting the gETH trading noted over $6 million in trading over Sunday. Interestingly, most orders were for buys, even though the volume is split roughly 50/50 between buyers and sellers. It is evident few people sold their gETH at the time, as there were four times as many buyers. It will be interesting to see what happens to Goerli ETH over the coming days and weeks.
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