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1
« on: Today at 06:05:06 AM »
Avalanche prepares the ground for growth in 2023Avalanche is one of the most promising young projects. Thanks to separating its blockchain into functional subnets, the current average transaction completion rate is 0.8 seconds. Ethereum, with its 6 minutes, looks like a dinosaur by comparison.
Launched 30 months ago, Avalanche was the first blockchain to partner with Amazon in January 2023. It allows developers to offer scalable blockchain decisions to users and governments that utilise Amazon Web Services. This led to a 2.7-fold increase in the number of active addresses this year to 97,000.
On 25 May, Circle announced that it was unrolling the EUROC stablecoin on Avalanche. EUROC is ranked third among euro-based stablecoins, with a market cap of $52 million.
That's nothing compared to the overall stablecoin market, but the unjustified tightening of regulation in the US and the imminent adoption of the MiCA bill in the EU have already led to a shift in the financial sector. The migration of companies from the US to Europe and increased transparency when dealing with cryptocurrencies in the EU will lead to higher demand for euro-based stablecoins.This will consequently affect interest in Avalanche as the costs users and operators encounter are way lower than those of Ethereum.
Avalanche is now trading 28% higher than it was in early 2023, but that's still a drawdown of 90% against its all-time high. The coin looks undervalued compared to the prospects and growth of the projects involved in the network.
Futures traders share this opinion. Open interest set an 11-month record on 18 April, and the 2023 funding rate is mostly in the green zone. StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
2
« on: May 26, 2023, 09:04:14 AM »
TUSD achieves second-highest trading volume among stablecoinsThe stablecoin market is going through hard times, as evidenced by its 14 consecutive months of decline. In May, the sector's capitalisation fell by another 0.5% to $130 billion. TrueUSD, however, avoided the negative trend. Its market capitalisation increased 2.7 fold to $2 billion, and, due to high demand during certain times, the coin was worth 20% more than the US dollar.
Demand for the stablecoin jumped after Binance decided to offer zero commissions in mid-March when trading pairs with TUSD. It's now the only stablecoin with 0% commission on the largest exchange by trading volume. A similar decision was made by Huobi and a number of other crypto exchanges. In April, TUSD's trade volume jumped by 670% to 38.4 billion, second only to USDT. In terms of market depth, the BTC/TUSD pair on Binance also ranked second behind BTC/USDT.
Despite achieving significant success in gaining acceptance, the stablecoin has a market share of just 1.5%. At the same time, more questions are arising for USDT, whose market share has reached 75%. Its trading volume has been declining over the past two months, and its market capitalisation is close to setting an all-time record. In contrast, Kaiko has identified a natural decrease in market capitalisation as the trading volume for BUSD and USDC falls.
According to Kaiko Research Director Clara Medalie, this discrepancy may be due to market makers' use of USDT in transactions between Tron, Tether and Binance. However, even when taking this assumption into account, the growth in its market capitalisation growth still looks doubtful. Tether's representatives have not yet commented on issues in the community.
The ongoing litigation against Tether over claims about the quality of its reserves and allegations of potential manipulation of Bitcoin's price is casting a shadow over the entire cryptocurrency market. If allegations of misconduct by the company are confirmed, the impact would hit a wide range of crypto assets due to the stablecoin's widespread use.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
3
« on: May 25, 2023, 01:51:09 PM »
Bitcoin: hoarding sentiment at its highestBitcoin's great take-off in Q1 brought the market back to life, but the following calm led activity to reach three-year lows. Trading volume now stands at $146 million, while the record for realised gains is $3.5 billion and $2.3 billion for recorded losses.
Much of the result is related to investors' unwillingness to spend coins at current prices. Hoarding sentiments are reaching new highs, with long-term holders (LTHs) accumulating 14.5 million BTC. Glassnode considers LTHs to be those with coins that haven't moved for over 155 days. The addresses of cryptocurrency exchanges and other aggregators are excluded from the analysis.
Liveliness is another indicator to measure sentiment. When the majority of coins remain idle, the indicator decreases. But when the expenditure of both new and old coins grows, liveliness does, too (read more about liveliness here). Despite the market's decline in 2022, hoarding sentiment still prevails.
Even short-term holders (STHs) remain indifferent to sales at current prices. The indicator of destroyed coins for the past 90 days remains around local lows. The last significant activity of this group was observed during November's FTX collapse.
Excluding skyrocketing network activity caused by the implementation of ordinals, users froze in anticipation of Bitcoin reaching new highs.
The trigger that gets this group moving again could be news from the US on the extremely last-minute national debt ceiling or a pause in the Fed's hawkish monetary policy. StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
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« on: May 24, 2023, 08:53:14 AM »
Why is Bitcoin not increasing in line with transaction demand?Last week, the number of daily transactions on the Bitcoin network reached an all-time high of 682,000 per day, but the price didn't rise with the increased load.
Ordinals caused the heightened demand. We've already covered this new way of transmitting digital objects. Since sending ordinals is usually done via small amounts of BTC, the network's cash turnover has remained low. Two years ago, indicators reached $13 billion, but now they don't exceed $4.5 billion.
The significant gap between the number of transactions and transfer volume hints at a lack of external interest in ordinals. This is also confirmed by a drop in the inflow of funds to crypto exchanges from the record-high of $4.2 billion two years ago to the current $0.6 billion. Simply put, users aren't rushing to buy Bitcoin and then carry out ordinal transactions.
Institutional investors (a key investment power since 2020) have now reduced their market presence for the fifth week in a row. During this time, they've withdrawn $150 million from Bitcoin funds.
But the majority of holders aim to keep Bitcoin in the hope that its price will continue to rise.
Long-term holders, i.e., those whose coins have been idle for over 155 days, have set a new accumulation volume record with 14.5 million BTC, and the MVRV ratio indicates that the cryptocurrency is oversold, as it has been in previous bearish cycles.
Financial markets are currently experiencing uncertainty due to a possible reversal of the Fed's monetary policy stance. CME's FedWatch tool predicts that there is an 80% chance that the interest rate will remain unchanged at the Fed's upcoming meeting in June. If the regulator pauses its interest rate hikes, it may give Bitcoin momentum, with some players, including institutional investors, turning their eyes once again to the cryptocurrency.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
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« on: May 23, 2023, 09:00:33 AM »
Should portfolio investing be applied to cryptocurrencies?Portfolio investing is widely used when dealing with stocks in order to balance risks or earn profit from the growth of a specific economic sector. Some investors try applying this practice to the cryptocurrency market, but it's hard to say that it performs well.Analytics firm K33 Research has calculated the yield of a portfolio consisting of the top 10 cryptocurrencies as of January 2018. At that time, the following assets topped the chart:
If a potential investor were to evenly distribute the amount invested across the listed cryptocurrencies, the return on the portfolio would now be -53%. By comparison, the S&P 500 was up 51% in the same period.
Among altcoins, only Ethereum managed to meet investors' expectations and compete with Bitcoin. The other coins have lost capitalisation for various reasons. For example, XRP (Ripple), which ranked second, has faced pressure from a US regulator and legal claims for allegedly holding an illegal ICO. Meanwhile, number 5 ranked Cardano has stumbled upon technical issues after it rolled out support for smart contracts.
However, that doesn't mean that altcoins can't be considered for long-term investing. Dogecoin has grown seven-fold to $0.07 per coin, and Solana, which premiered on crypto exchanges in 2020, still trades at more than 20 times its offering price.
The above arguments point to the poor performance of traditional portfolio investing. The cryptocurrency market is young, and coins see continuous rotation. Like a stock index, the underlying asset is Bitcoin, which many analysts recognise as a 'store of value'. However, one should be cautious when buying altcoins and focus on those with significant growth potential. One should also be ready to get rid of assets just in case the project faces any issues.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
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« on: May 22, 2023, 09:18:07 AM »
Warning: Bitcoin was always part of Tether's reservesThe low financial transparency of Tether's reserves and the lack of a full-fledged audit sometimes lead to misinterpretations of fresh data. For example, at the end of Q1, the issuer of the USDT stablecoin released a report from BDO Italian, which for the first time, singled out reserves in Bitcoin as a separate line item. This allowed a number of media outlets to interpret events as new purchases of cryptocurrency for the profits generated by the transactions. K33 Research warns that it was misleading readers.First of all, one should note that the release of quarterly results isn't an audit. BDO creates those based on data provided by Tether. The numbers should be approached sceptically, as independent accounting organisations have stated on multiple occasions. Reports don't contain any information on Tether's obligations to third parties, and the categories of other investments and loans have never been disclosed. Moreover, Tether once sought a court order to remove its obligation to publicly disclose reserves.
In the latest report, Bitcoin had its own separate line. This came amid Tether gaining significant profits from operations and reducing competitors' market share. At the year's end, BUSD may completely disappear due to NYFDS's prohibition on Paxos in February from minting this stablecoin for Binance. USDC faced a trust crisis after it risked losing 8% of its reserves due to SVB's bank collapse.
The amount of Bitcoin held in reserve matched the net income generated in Q1, which reached $1.48 billion (Tether isn't a public company; the data were made available in a press release). This led to the spread of misinformation. In fact, Bitcoin has been in its reserves for a long time.Firstly, this is evidenced by the strong correlation of the 'Other' part of the reserves category priced in Bitcoin.
Secondly, back in 2019, a lawsuit against Tether revealed that the company had spent some of its reserves to buy Bitcoin. Lawyer David Miller admitted in court: "In addition to cash and cash equivalents, Tether invested in other instruments, including Bitcoin."
The above arguments indicate that USDT has not been sufficiently backed by cash equivalents, at least historically. Buying Bitcoin with reserve funds is only partly justified if the cryptocurrency's price is rising. Apart from Bitcoin, corporate bonds accounted for almost half of all reserves two years ago.
If the value of the portfolio declines and there's a rapid outflow of funds, USDT risks a liquidity crisis, which would lead to a loss of its peg to the US dollar. This would consequently provoke panic due to the stable coin's significant market share and widespread use.For the past two years, the company has been busy rebalancing reserves and improving its financial sustainability, but it's almost impossible to evaluate its success without a decent and complete audit. However, the tensions between Tether and law enforcement aren't over yet. More proceedings are on the way. Last year, the court demanded ledgers and other financial records, including a cash flow history, for the past few years. The claims revolve around the issuance of unsecured USDTs and market manipulation.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
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« on: May 19, 2023, 08:45:34 AM »
Dogecoin hype: the number of transactions exceeds Bitcoin and Ethereum'sIntroduced in January by Casey Rodarmor, the Ordinals protocol first made waves on the Bitcoin network. Now it's reached Dogecoin. The protocol allows users to number mined units (Satoshi for BTC or Elons for DOGE) and thus transfer various 'files' over the network. This can be digital items (similar to NFTs) or coins (similar to ERC-20). On the Dogecoin network, the newly appeared elements were dubbed 'doginals', and fungible coins were called DRC-20.To assess the new protocol's impact, we'll take a look at the Bitcoin network, which saw its highest load in the past year. Digital items garnered the first wave of interest, although they were soon completely replaced by BRC-20 tokens. The hype was so intense that transactions with Ordinals reached 65% of the total amount on certain days.
Now, doginals are taking Dogecoin by storm. In just the past day, the number of transactions set a record, exceeding 1.1 million. The previous high of 200,000 was set in 2013.
In terms of this indicator, Dogecoin surpassed both Bitcoin and Ethereum.
Dogecoin users were the luckiest. They didn't run into higher fees due to the heightened demand for transactions. Dogecoin is 4.7 times faster than Bitcoin and can hit an average speed of up to 33 TPS, which means it can process nearly 3 million transactions per day. That's why even a 40-fold increase didn't overload the network.The introduction of ordinals also had no effect on Dogecoin's price.
Doginals are exchanged due to the speculative interest of a narrow circle of crypto enthusiasts. What's more, the process itself remains inconvenient because of the lack of the same kind of services and applications that Ethereum or Solana boast. Traders hope that some of these quasi-coins or NFTs will achieve cult status in the future. However, in most cases, such expectations are met only with losses.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
8
« on: May 18, 2023, 10:56:33 AM »
Ripple is up 9% in just 12 hours as court decision approachesThe Ripple trial is important for the company and the entire cryptocurrency market as regulators are trying to label XRP as a security. But the lack of clear criteria for dividing cryptocurrencies into different classes leads to a consequent weakness in the courts.Developers minted 100 billion XRP coins, 80 billion of which were gifted to Ripple (this is how the company explains its non-involvement in the token's issuance). Between 2013 and 2018, the company garnered investments from funds and individuals by selling $1.3 worth of cryptocurrency. The SEC considered that to be an ICO and labelled XRP a security.In 2020, the SEC sued Ripple. Since then, the debate has proceeded with mixed success. The regulator's weakness was the lack of clear criteria for recognising cryptocurrencies as securities and a speech by the SEC's former Director of Corporation Finance, William 'Bill' Hinman, who referred to Bitcoin, Ethereum and XRP as commodities. The discussion on this aspect in court reached a ridiculous point, as SEC officials refused to identify the person in the video.
Sensing a weak spot, Ripple's lawyers requested Hinman's reports. The SEC claimed his assessment was a "personal point of view" that had nothing to do with the case and refused to provide any documents. On 16 May, Judge Analisa Torres ruled that the privilege of the deliberative process didn't protect the transcript of Hinman's speech and was a judicial document subject to the presumption of public access.Some media spread the word, calling the judge's decision "a victory for Ripple", followed by a 9% jump in Ripple's value in the 12 hours following the news.
However, potential investors must consider some crucial factors. First, the publication of Hinman's speech doesn't mean that Ripple has beaten the SEC. The trial will continue, and a final decision is expected within a year. The majority of such manipulative headlines have resulted in subsequent price deflation (see our March article "Pump & Dump? XRP"). Second, Ripple continues to use reserved XRP to fund its operations. The circulating supply now stands at 52 billion coins, with 43 billion in escrow with the company. It can sell up to 1 billion coins every month (learn more about the mechanics).
XRP is a centralised coin where the company is the key owner and approves the list of recommended validators. The company's ups and downs directly affect XRP's value. A Ripple court victory in 2023 is possible, but it has more to do with legislative gaps and the regulator's weak position.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
9
« on: May 17, 2023, 08:53:47 AM »
New highs for the Bitcoin networkIntroduced in 2023, the Ordinals protocol gave users the ability to mint NFTs and meme tokens on the Bitcoin network (read more on the mechanics on the creator's blog). This led to excitement and some new record highs.Daily transactionsLast week, the number of daily transactions surpassed the 2007-high by 39%, reaching 682,000.
The network has faced an overload because of the low processing speed, and the mempool queue has exceeded 500,000 transactions. Users have experienced halted transfers, and the average fee has risen to $30.Number of transactions per blockThe number of transactions has jumped from an average of 2,000 to 4,400 per block.
It's mostly due to BRC-20 coins having displaced other types of ordinals. Simply put, BRC-20 consists of text that helps pack transactions more densely.Transaction volumeAn interesting pattern can be observed when analysing the average volume per transaction. NFTs appeared on the network first, pushing the indicator to a record-high 1.5 KB, as it takes a significant block size to transfer "files". But by the end of April, BRC-20 have replaced NFTs, causing the average transaction volume to drop to the 12-year low of 405 bytes.
FeesThe new protocol was highly appreciated by miners as the hype around ordinals has resulted in fee growth (users have to offer higher fees for their transactions to be processed faster). This is the fifth time in history that the fees have exceeded the block reward (6.66 BTC against 6.25 BTC, respectively). It's also the third time that daily fees have reached $17.8 million. It previously occurred during the cryptocurrency market rally.
Users are divided into two camps in their opinions. On the one hand, ordinals increase demand and empower the network. On the other, they go against Satoshi Nakamoto's idea of a purely payment functionality and cause fees to rise.
One can only claim that the network records caused by ordinals haven't led to similar price shocks for Bitcoin. The number of minted BRC-20 has dropped by 36%, and the mempool load decreased by 45% from last week's highs.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
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« on: May 16, 2023, 08:31:12 AM »
Bitcoin network overload leads to surge in demand for LitecoinBitcoin is the slowest yet most protected network. Cryptocurrency is recognised by financial analysts as a store of value, but it isn't very suitable for frequent payments. To confirm payment, the transaction must be included in a block that's formed once every 10 minutes. As the network was improved, the number of included transactions grew by increasing a block, whose average size exceeded 2.5 MB this year.
Nevertheless, when demand for transfers is high, the network encounters a shortage of space since an average of a little over 4,000 transactions are sent for processing in those 10 minutes.
For the transaction to be sent in time during peak hours, users must offer miners higher fees. The fees exceeded $30 on 8 May, which came out of the blue both for regular users and big players like Binance.This was when many remembered the second coin (by launch date) after Bitcoin. Litecoin was designed in 2011 specifically for quick and cheap transfers. Its blocks are formed four times faster, and its speed reaches 56 TPS versus Bitcoin's 7 TPS. They're technically very much alike, which is why Litecoin is often called Bitcoin's little brother.Its relatively high speed and lower popularity helped Litecoin avoid the problems that the implementation of Ordinals has brought (see our piece for more details on Ordinals). Moreover, the fee dropped to less than $0.01 in May. 
As a result, the demand for transactions in Litecoin grew five-fold in May, going from an average of 100,000 to 500,000 transactions per day. The number of new active addresses also surpassed those of Bitcoin, while the fee stayed at its lowest levels.
Since 8 May, when Bitcoin faced an all-time high overload, Litecoin has demonstrated confident growth against it.
And there's more to come for Litecoin users and investors. The altcoin is the first among the major networks to hold a halving event, which is expected in early August of this year. Traditionally, a cut in rewards for miners boosts further growth.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
11
« on: May 15, 2023, 07:30:57 AM »
Why a US default would lead to the collapse of the crypto marketBitcoin welcomed the bank collapse in March, moving up 21% to $28,400, as volatile monetary policy and the risk of new bankruptcies boosted interest in the decentralised asset. But in the event of the US defaulting on its national debt, the situation isn't so simple, as there's a strong connection between traditional finance and cryptocurrencies via stablecoins.Stablecoins act as conductors, facilitating the payments and valuation of cryptocurrencies. Most crypto exchanges use stablecoins as a base payment currency for financial operations. Despite the loss of credibility and long-term decline of this segment caused by the collapse of the third-largest stablecoin, UST, a year ago, it's still a significant element of the crypto system, with a market capitalisation of $130 billion or 12% of the entire market.
USDT and USDC are the leading stablecoins, each with a share of 64% and 23%, respectively. However, the latter has shown a significant dependence on the banking sector, losing its peg to the dollar amid SVB's bankruptcy and trading at a 10% discount on 11 March. It was a result of blocking SVB's 8% collateral and a risk of losing funds. Since then, USDC has seen its capitalisation cut to $30 billion.
What's more, the primary danger is not just and not so much that assets are held at banks, as it is that US Treasury Bonds make up a large share of what's held in these stablecoins' reserves. If one can depend on the invulnerability of a systemically important bank when choosing a counterparty, things change when it comes to the potential for a default on American debt. In that case, US bonds held in reserves would turn into worthless paper.Anticipating the new risks, Circle (USDC's issuer) adjusted its portfolio. Now, the maturity date of the bonds it holds is coming by June, the month that a default could potentially be announced.
Assessing Tether's risks is a lot harder because it's not known exactly which banks hold its reserves and which assets are included in the "corporate bonds" section due to the company's offshore registration and unwillingness to go into details. In terms of bonds, they account for 74%, worth $60.5 billion, while the average expiry date is "less than 90 days".
BDO report of 31.03.23From this, we can conclude that USDT has a non-zero chance of losing its peg to the dollar if the US defaults on Treasury bonds.
Despite Bitcoin's opposition to the traditional financial system and the collapse of the dollar in the event of a default, the cryptocurrency market could face panic and sell-offs due to the loss of USDT's peg to fiat. It's also worth noting that the likelihood of a default being announced is still low since it would entail systemic risks and hard-to-predict consequences for the US economy.StormGain Analytical Group(platform for trading, exchanging and storing cryptocurrency)
12
« on: May 12, 2023, 10:44:01 AM »
Ethereum staking yields up 55% in a monthIt's been a month since implementing the Shanghai hardfork and allowing validators to withdraw both rewards and staked deposits. During that time, users have withdrawn 1 million ETH in rewards and another 1.2 million ETH due to the full withdrawal of validators from staking.
As expected, the main pressure came from US crypto exchanges, where the SEC is trying to get Ethereum labelled a security. Kraken has agreed to a pre-trial settlement, a $30 million fine and a gradual exit from staking. The crypto exchange has now withdrawn 528 million ETH worth $1 billion, with [censored] coming in second at 228 million ETH worth $417 million withdrawn.
It's worth looking at the fortuitous decision by developers, who limited set a daily limit of 1800 validators for full withdrawals and up to a daily amount of around 58,000 ETH. While the exit queue is forming on the one hand, on the other hand, the inflow of those wishing to participate in the staking is increasing. The inflow exceeds the outflow, increasing the number of validators and the amount staked. The recent surge in interest in meme cryptocurrencies also contributes to this, causing an increase in network congestion and fees. As a result, staking jumped from 4.4% to 6.8% in a month.
The fears caused by the expectation of an ETH influx to the exchanges didn't prove to be true. Having received their reward, most validators reinvested it in new staking. Some investors allocated coins to cryptocurrency exchanges for subsequent sale, but the 1.8 million ETH inflow doesn't look significant.
Increased pressure from US regulators and the potential exit of [censored] from staking with a 12% share worth 2.5 million ETH are risk factors for Ethereum. The most significant damage would come from recognising cryptocurrency as a security.
It's worth noting that some congressmen are unhappy with SEC chairman Gary Gensler's policy, which is already leading to an outflow of investment from the country to freer economic zones. For example, in early May, [censored] launched an international division registered in Bermuda. A change in SEC management would hint at liberalisation and a search for compromise, which would boost Ethereum.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
13
« on: May 11, 2023, 01:11:26 PM »
Bitcoin fever: skyrocketing fees and suspension of Binance withdrawalsThe Bitcoin network overload resulted in a surge in fees, which averaged $31 per transaction on 8 May. Miners were excited by the news because, for the first time since 2017, the fees exceeded the reward for mining a block.
But users have encountered a number of problems. Many transfers are stuck in the mempool because of low fees, as miners choose transactions with the highest fees when forming blocks. Experienced users have manually set a fee that's higher than the current average. For some transactions with a large number of entry and/or exit points, the fee has reached $1,500.
Some operators, including Binance, were unprepared for the fee increase and didn't raise the rate for users in time. As a result, transactions got stuck in the mempool. The exchange has halted withdrawals twice to raise the transfer fee. The company also announced that it is prioritising the implementation of the Lightning Network, which runs on top of the Bitcoin network and allows fast transactions between LN members at minimal costs.The situation still remains tense. There are 400,000 unconfirmed transactions in the mempool, which will take 24 hours to process. And, despite the increased fees, demand is high.
The main pressure on the network comes from the Ordinals protocol and BRC-20 tokens based on it that appeared in 2023. Ordinals allowed the numbering of mined satoshi, which led first to the emergence of NFT analogues and then to coins (ERC-20 analogues). Half of all transactions are currently linked to Ordinals.
A closer look at the Ordinals shows that the boom in new coins overshadowed the demand for NFTs. ORDI, NALS and PEPE are among the most sensational ones. This is good news for those who use Bitcoin solely as a payment network, as it speaks to the temporary nature of the excitement. If over 20,000 images were minted on some days in April, less than 1,000 images are released now.
The hype around the BRC-20 coins will likely cool down soon, with the fee returning to its lower rates.
Despite the difficulties, this is a positive development for Bitcoin. First, miners will only have to rely on fees when the last coin is mined. The new application of the network is to support their engagement and keep security and decentralisation at a high level. Second, the emerging crisis encourages the rise of second-tier networks and the development of additional services. Third, the growing demand for Ordinals leads to an increasing demand for Bitcoin. So if Biden follows Trump in minting his own collection, only with Ordinals, it'll increase the investment appeal of Bitcoin among Democrats.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
14
« on: May 10, 2023, 11:51:19 AM »
Interest surges: Bitcoin network fee hits a one-year highFour US banks have gone bankrupt, and a dozen more are struggling. For example, PacWest shares collapsed by 50% in the past day, and Western Alliance saw a 40% drop. According to polls by Gallup, the world's largest polling agency, half of US citizens are worried about the safety of their bank accounts.As the Fed continues to tighten monetary policy, which reduces the value of a number of assets on banks' balance sheets and the demand for banking services, the likelihood of further shocks is high.
US Federal Reserve key interest rate, %. One way to insure against a depreciating dollar and the risk of a total loss of funds beyond the FDIC's insured amount ($250,000) is to buy Bitcoin. The cryptocurrency's decentralised nature protects against an attack on the asset. The network's average speed doesn't exceed seven transactions per second, so those wishing to make a transfer are increasing the amount of fees paid to complete their transaction as soon as possible. Due to a surge in interest, the average fee on the Bitcoin network has increased 2.5 times in the last week to a one-year high of $7.20. The share of commissions in miners' remuneration jumped from 5% to 16%.
Some analysts consider Bitcoin to be a "store of value" similar to gold. For the same reason, there has been a surge of interest following the bank collapses in the United States, with Bitcoin's share of other crypto assets rising from 40% to 46% in 2023.
Bank crises aren't all the woes facing the US economy this year. As early as 1 June, the government could announce a technical default on debt obligations, as money is being spent faster than it's coming in. Congress needs to increase the debt limit, which currently sits at $31.4 trillion.
Geoff Kendrick, an analyst at Standard Chartered Bank, believes that the probability of a default is low, although if it occurs, he predicts that Bitcoin's price could rise to $50,000.
In addition to demand for Bitcoin among new market participants, the emergence of the Ordinals protocol and BRC-20 standard have had a significant impact on the rise in commission. Put in simpler terms, they can be deemed similar to NFTs on the Bitcoin network that allow digital items to be exchanged. PEPE, which has also had some buzz around it lately, is a BRC-20 token, as well. In recent days, the tokens have accounted for nearly half of all transactions on the network due to speculative hype.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
15
« on: May 05, 2023, 10:10:20 AM »
Crypto bombs worth 4.3 million BTCThe upcoming changes in the form of the de-dollarisation of the global economy and a potential default on US debt offer tempting prospects for Bitcoin, which stands as an alternative to the traditional financial system. But the cryptocurrency has its own constraints, which could be triggered this year.205,500 BTCThe US government has accumulated 205,500 BTC worth $6 billion on its balance sheet following the uncovering of hacking attacks and the confiscation of stolen funds. For a long while, the US government held those funds. However, in March, it transferred 10,000 BTC to a [censored] address to later be sold.
As money into the government's coffers goes out faster than it comes in, the US could face a technical default as early as 1 June, according to Treasury Secretary Janet Yellen. The shortage of funds could prompt the government to sell off cryptocurrency reserves as early as this month.137,900 BTCThe collapse of the Mt.Gox cryptocurrency exchange in 2014 significantly impacted crypto markets. Between 2011 and 2013, hackers managed to steal around 650,000 BTC. Another 140,000 BTC that had been considered lost were recovered, and the assets were transferred to cold wallets.
Following bankruptcy proceedings and the receipt of claims from affected customers, the Mt.Gox trustee said payments would begin in 2023. Users will only be able to recover 0.23 BTC for each BTC lost, but the price difference more than compensates for the loss. At the date of the bankruptcy filing in 2014, BTC was trading at $500, which is now worth 58 times that amount.
Once they have an impressive profit in hand, most users will likely rush to cash out. 137,900 BTC could potentially add $4 billion in pressure from sellers.4 million BTCSpeaking of crypto bombs, one can't help but mention the 4 million BTC considered permanently lost. Last week, 1,100 BTC that had been inactive for more than 10 years were reported to have moved.
So not all coins older than 10 years are considered hopelessly gone. The total amount of "lost" BTC is estimated to be worth $113 billion.StormGain Analytical Group (platform for trading, exchanging and storing cryptocurrency)
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