Curve DAO’s CRV Token Rallies 500 Percentage , Hits 22-Month Highs – What’s Driving the Surge?

The Curve DAO token (CRV) has experienced a remarkable rally, soaring 500% in just 30 days and reaching a 22-month high of $1.33 on December 7. The token's market cap surged to $1.6 billion, marking its highest level since February 2023. However, a slight correction followed, with CRV dropping by 7% in the last 24 hours, as the token became overbought, and is currently trading at $1.1. Despite this dip, CRV’s daily trading volume has surged by 20%, reaching $635 million, signaling continued investor interest.

The price increase can be attributed to several factors, with the launch of Savings crvUSD (scrvUSD) playing a pivotal role. According to Illia Otychenko, lead analyst at CEX.IO, the introduction of scrvUSD in early November has significantly impacted the token’s price. ScrvUSD is a yield-bearing stablecoin designed to compete with other stablecoins like Sky’s sDAI and Ethena’s sUSDe. It allows users to earn rewards by simply holding the token, with returns currently reaching 13% annual percentage rate (APR).

In addition to its yield-bearing feature, scrvUSD enhances the crvUSD ecosystem by helping stabilize interest rates, which have been volatile due to high leverage demand. Following the U.S. elections, borrowing rates surged to 50% on key markets. To address this, Curve DAO raised scrvUSD holders' revenue share from 10% to 20%, while also adjusting the crvUSD yield mechanism to reduce borrowing rates to 20%, boosting scrvUSD deposits.

This new offering has driven increased demand for CRV, further fueling the token’s price rise. As the Relative Strength Index (RSI) for CRV surpassed 75 on December 4, signaling that the token is in the overbought zone, analysts suggest a potential pause in the rally. Otychenko anticipates that CRV will likely experience a “notable” correction before it can resume its upward movement.

Despite the short-term pullback, the long-term outlook for CRV remains positive. As the Curve Finance ecosystem continues to expand, demand for the CRV token is expected to grow, which could drive future price surges. Investors are keeping an eye on how the platform’s ongoing developments will shape the token’s performance in the coming months.