- Injective’s latest update could have major implications for INJ’s protocol and price
- However, at the time of writing, the altcoin’s price action was stagnant
The Injective Protocol is in the news today after it announced the rollout of its first exchange-traded product (ETP), called AINJ. This ETP is issued by 21Shares. This is a development that could be the start of a big trend, one that offers investors in the traditional financial world exposure to blockchain and crypto.
According to the official announcementthe development marks an important milestone for Injective in its plan to integrate with traditional financial markets. The blog even revealed that the new ETP will allow traditional investors to take advantage of staking rewards.
Impact on the injection protocol
A potentially significant benefit for Injective is that the AINJ ETP provides an opportunity that large institutions can use to invest in the protocol in a transparent and regulated manner.
It could therefore provide an opportunity to secure institutional liquidity in traditional investment markets. If that happens, Injective will be in the fastlane for more utility.
Will the launch of Injective ETP impact INJ’s price action?
An influx of institutional liquidity into the Injective protocol through the AINJ ETP has the potential to improve the utility and thus demand for INJ. Such an outcome would drive up the price of the token and potentially encourage longer-term HODLing. An outcome that would lead to positive price action in the long term.
However, a look at INJ’s price action showed that the announcement may not have had a significant impact on the price. It was valued at $26.85 at the time of writing, after encountering some resistance within the same price range. This is a sign of a slowdown in demand, compared to what we saw after the recent recovery from monthly lows.
While INJ’s short-term performance may not indicate any significant impact from the AINJ ETP, its impact could be felt in the long term.
As for the short-term scenario, we evaluated INJ’s transaction and address activity to determine the state of the network.
Large transactions above $100,000 have seen a slight increase since July 14. Unfortunately, the number of transactions remained limited – a sign of low activity.
Source: IntoTheBlock
We also found that in the same weekly period the number of active addresses and new addresses increased slightly.
Nevertheless, the numbers remained within modest levels and even declined over the past two days.
Source: IntoTheBlock
Simply put, a look at the aforementioned on-chain metrics showed that INJ demand is now recovering, albeit gradually. That could be why INJ’s near-term upside potential will be limited.