Ethena has experienced a remarkable resurgence, driven by a combination of rising perpetual funding rates and the broader crypto market rally, setting the stage for further growth in the coming months.

Following the election victory of Donald Trump, the cryptocurrency market surged, bringing new attention to Ethena’s USDe token. In the last month, USDe has attracted nearly $1 billion in fresh capital, pushing its market cap to $3.44 billion—just 5% shy of its all-time high of $3.6 billion reached in July, according to DefiLlama data.

Ethena faced significant challenges earlier this year when the crypto market cooled after a peak in March. USDe, pegged at $1, is a synthetic dollar token that uses a combination of Bitcoin (BTC) and Ether (ETH) as collateral, paired with short perpetual futures positions to generate yield. When perpetual funding rates were positive, this strategy was highly profitable, providing substantial yields for investors. However, when those rates turned negative in August and September, the protocol became less attractive, with investors withdrawing $1.2 billion from the platform.

Now, with the resurgence of Bitcoin, which has hit multiple all-time highs, Ethena is seeing a revival. The protocol is currently offering a 29% annualized yield for token holders who stake their assets, as Bitcoin’s perpetual funding rates have surged in recent weeks, providing a significant tailwind for the project.

Looking ahead, there are additional catalysts that could drive further growth for Ethena. The decentralized lending platform Aave has integrated USDe as collateral, allowing users to borrow against the token while still earning yield. Ethena’s co-founder, Guy Young, has expressed optimism that this integration will lead to billions of dollars flowing into the platform over the next month. Additionally, two centralized exchanges (CEXs) are set to list USDe in the near future.

Ethena also plans to share a portion of its protocol revenue with ENA governance token holders. This move comes after a governance proposal was approved by the project’s risk committee in early November, with the backing of Wintermute, a crypto trading firm. The approval is seen as a positive step, as the crypto community anticipates more favorable regulations for decentralized finance (DeFi) protocols under a Trump administration, further boosting Ethena’s growth prospects.