Applying for a spot ETF, with a monthly increase of over 104%, what is HBAR's background?

Author: Golem, Odaily Planet Daily

Today, the L1 blockchain Hedera's native token HBAR broke through 0.38 USDT, reaching a high of 0.39 USDT, with a 24-hour increase of over 40% and a rise of over 104% in the past month, bringing the price back to the levels of November 2021.

Hedera blockchain was launched as early as 2019. On November 13 of this year, crypto investment firm Canary Capital submitted an HBAR ETF application to the U.S. SEC. Compared to the massive attention and discussion generated by the ETF applications of SOL, XRP, and LTC, HBAR has not garnered the same level of interest, and many crypto players who entered the market during this bull run have not even heard of the project.

So, what exactly is the background of the Hedera blockchain? What other reasons are behind the surge in HBAR prices? Odaily Planet Daily will provide a brief introduction and analysis of Hedera in this article.

Introduction to Hedera

Hedera is a decentralized, open-source proof-of-stake public blockchain that utilizes a leaderless, asynchronous Byzantine Fault Tolerance (ABFT) Hashgraph consensus algorithm at its technical core. According to data from its official website, Hedera blockchain achieves consensus finality in just 2.9 seconds, with an average transaction cost of $0.0001, while the network has low energy consumption, with an average energy cost per transaction as low as 0.000003 kWh, in contrast to Solana's energy consumption being 170 times higher.

Developers can use the Hedera blockchain for real asset tokenization, building DeFi and NFT ecosystems, creating decentralized identities, and using native consensus timestamps to create low-cost, scalable, and publicly verifiable data logs—recording paid events, supply chain origins, IoT sensor data, and more.

The Hedera blockchain is governed by a board and the Hedera Governing Council, which consists of up to 39 term-limited and highly diverse leading organizations and companies, including well-known firms and institutions such as Google, Dell, and abrdn.

HBAR is the native token of the Hedera blockchain, used as network transaction fees and as a staking token for the POS mechanism. The total supply of HBAR is 50 billion, with a current circulating supply of over 38.19 billion, giving it a circulating market cap of $13.28 billion, ranking 19th in the crypto market.

Up to this point, Hedera gives the impression of being just another conventional L1.

What Other Reasons Are Behind the Surge in HBAR Prices?

As the price of HBAR tokens rises, the market generally attributes the main reason to the positive news of the HBAR ETF application submitted by Canary Capital on November 13, with HBAR rising over 30% on the day the news was announced.

Generally speaking, price increases triggered by news do not last long. On November 26, Bloomberg ETF analyst James Seyffart also stated that the SEC's decisions regarding the ETF applications for SOL, XRP, LTC, and HBAR may extend until the end of 2025.

With the positive news materializing and the actual ETF approval still a long way off, we initially thought HBAR's price would retreat. However, HBAR's price remains on an upward trend, having returned to the levels of the November 2021 bull market. Therefore, Odaily Planet Daily summarizes the following four reasons:

The Emergence of Altcoin ETFs, HBAR Being Undervalued Compared to Other Tokens

Currently, there is a surge in altcoin ETFs, with ETF applications for SOL, XRP, LTC, and HBAR being submitted in succession. According to Nate Geraci, president of ETF Store, at least one issuer is currently attempting to apply for an ETF for ADA (Cardano) or AVAX (Avalanche). Although in the past month, HBAR tokens have outperformed SOL, XRP, and LTC with a rise of 104% compared to their increases of 40%, 32%, and 25% respectively, HBAR's market cap remains relatively low, even ranking behind DOT at 19th place.

In fact, before Canary Capital submitted the HBAR ETF application, in October, Canary Capital launched the HBAR Trust in the U.S. specifically for qualified individual and institutional investors. Canary Capital CEO and former chief investment officer of Valkyrie Funds, Steven McClurg, also stated that this move is to pave the way for the future launch of the HBAR ETF.

Therefore, as one of the few altcoins currently supported by institutions and having submitted an ETF application, investors may believe that HBAR tokens are undervalued and still have significant growth potential.

HBAR Board Member Expected to Become Next SEC Chairman

With Trump set to take office soon, the next chairman of the U.S. Securities and Exchange Commission is also a focus of the crypto market, and HBAR board member Brian Brooks is one of the potential candidates for the next SEC chairman. According to prediction market Kalshi data, although former SEC commissioner Paul Atkins from the George W. Bush administration has a 70% chance of winning, Brian Brooks still has a 20% chance.

If Brian Brooks is successfully nominated by Trump as the next SEC chairman, it would not only mean that the SEC may become more crypto-friendly, but it would also be a significant positive for HBAR, and this expectation is helping to sustain the upward trend in HBAR prices.

Additionally, according to FOX Business reporter Eleanor Terrett, sources have revealed that Trump is expected to announce his choice to replace Gary Gensler as the new SEC chairman as soon as tomorrow. This answer is likely to be revealed soon.

Development with the Tailwind of the RWA Track

The RWA track is also gradually revitalizing, with institutions increasing their investments in RWA. Stablecoin issuer Tether launched the asset tokenization platform Hadron by Tether on November 14, and Visa introduced the Visa Tokenized Asset Platform (VTAP). The Hedera blockchain is also actively developing RWA; according to Hedera's official data, the value of assets tokenized through the Hedera blockchain has reached $50 million, having provided tokenization services for well-known companies such as Dovu, abrdn, and Shinban Bank.

Canary Capital CEO and former chief investment officer of Valkyrie Funds, Steven McClurg, also stated that Hedera represents a type of enterprise technology that connects the scalability of cryptocurrencies with the real world, and expects further growth in technology applications.

FOMO in the Korean Market

In terms of trading volume, HBAR is also experiencing FOMO in the Korean market. According to CoinGecko data, on South Korea's largest exchange Upbit, the highest trading volume in 24 hours is for XRP, exceeding $5.372 billion; HBAR follows with a 24-hour trading volume of over $1.353 billion, three times that of BTC. Meanwhile, compared to Binance, HBAR's 24-hour trading volume on Binance exceeds $1.289 billion, which is less than that on Upbit.

Additionally, on another Korean exchange, Bithumb, HBAR's 24-hour trading volume reached $1.43 billion, surpassing the trading volume of BTC on that platform and even exceeding the 24-hour trading volume of HBAR on Upbit.

It is evident that the Korean market is not only a major buying market for XRP but also a significant buyer of HBAR.

The Arrival of Altcoin Season, Old Tokens Can Also Revitalize

Trends are always unstoppable. Over the past year, altcoins have performed poorly, first caught in the controversy of VC tokens being "overvalued with low circulation" and massive unlocks, then facing the phenomenon of BTC continuously reaching new highs while the altcoin market remained sluggish, and finally dealing with the impact of meme coins running rampant. Even seasoned industry veterans, such as Cobo co-founder and CEO Shen Yu, previously asserted that "there will be no altcoin season in this cycle."

As a result, the sector rotation "though late, has arrived," and the altcoin season has ultimately come. According to analysis by Odaily Planet Daily's Nan Zhi, the funding rate is in a safe zone, and the market share of altcoins is approaching the initial launch point of 2021.

The market is accustomed to seeking reasons for price increases; HBAR may just be a microcosm, representing that perhaps in a true altcoin season, even "old tokens" can make market players dizzy with their rises. Instead of lamenting, it might be better to join the trend.