A week of highs, lows and everything inbetween
DATA from CryptoCompare shows that Bitcoin's price hit a new all-time high above $73,400 last week. However, shortly after, the cryptocurrency’s price started plummeting to below $65,000 before recovering. Bitcoin is now trading at $66,860.
Ethereum’s Ether, the second-largest cryptocurrency by market capitalization, moved in a similar way. Over the past week, it topped the $4,000 mark before dropping significantly to a low under $3,500. ETH has since recovered and is now trading at $3,500.
Headlines in the cryptocurrency space over the week largely focused on the ongoing impact of the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States and the cryptocurrency’s upcoming halving event.
Over the week, Bitcoin miners' revenues soared to a new all-time high as the price of Bitcoin surged past the $70,000 mark to a new record. Daily miner revenues, as a result, peaked at $78.6 million, surpassing a previous high seen in April 2021 during the last major cryptocurrency bull run.
Bitcoin miners generate income by discovering new blocks, each containing a reward of 6.25 BTC, and by collecting the transaction fees paid to insert transactions into these blocks. The reward is set to halve next month in a halving event.
The halving event in Bitcoin's network is a pre-set occurrence every 210,000 blocks, which occurs roughly every four years, that slashes rewards following the cryptocurrency’s set monetary policy.
This past week also saw asset manager VanEck drop sponsor fees for its Bitcoin Trust ETF (HODL) for the first $1.5 billion, which led to significant inflows that helped it becomes the sixth-largest U.S.-listed spot Bitcoin ETF, surpassing Invesco’s BTCO and Valkyrie’s BRRR ETFs.
The cryptocurrency market got so heated that investors started piling into leveraged Bitcoin ETFs, while futures premiums on the CME neared 20% amid record-high open interest. The trend started fuelling a wave of leveraged Bitcoin ETF offerings.
Meanwhile, the President of El Salvador Nayib Bukele, the first country to adopt Bitcoin as legal tender, revealed larger-than-expected Bitcoin reserves for the nation after moving 5,689.69 BTC to a new cold wallet address and publicly revealing the move.
MicroStrategy, the largest corporate holder of Bitcoin, filed plans to raise $500 million through a convertible debt offering, hoping to use the proceeds to bolster its BTC holdings further. The firm, which now open identifies itself as a “Bitcoin Development Company,” now holds over 205,000 BTC worth nearly $15 billion.
Notably, Nasdaq-listed cryptocurrency exchange Coinbase is planning to offer $1 billion in convertible senior notes, in a bid to settle its existing debt and allocate their funds for general corporate purposes. The notes can be exchanges for shares of the firm in 2030.
Ethereum’s Dencun hard fork goes live
The Ethereum network successfully implemented its highly-anticipated Dencun hard fork over this past week, facilitating cheaper transactions on its Layer-2 networks. The effect of the upgrade was quickly noticed, with average transaction fees on these plunging after it went live.
Dencun introduced proto-danksharding through EIP-4844, allowing data to be handled through a storage mechanism called “blobs.” These blobs are large blobs of data that can be “much cheaper than similar amounts of call data,” according to ETH co-founder Vitalik Buterin.
Meanwhile, Ethereum witnessed a significant uptick in revenue, marking its highest point since May 2022, with a remarkable 78% increase compared to the previous week. This surge aligns with a fresh wave of speculative interest in memecoins that also saw Ethereum accrue $193 million in transaction fees in a single week.
According to CCData’s latest Exchange Review, institutional investors have seemingly been moving their focus towards Ethereum, as in February Bitcoin futures volumes on the CME saw a modest 0.31% rise to $74.2 billion, while ETH futures climbed 3.25% to $17.1 billion.
The exchange saw an 8.21% uptick in BTC options trading volume, hitting the $1.70 billion mark. ETH options experienced a significant boost, soaring 26.4% to achieve a new peak of $655 million in trading volume.
Decentralized exchange trading volumes on the Ethereum network have also soared by 40%, hitting $20 billion last week, further straining the network, culminating in a spike in transaction fees to an average of $28, a near two-year high.
ETH holders stand to gain from this flurry of activity due to the cryptocurrency's deflationary feature, introduced after the "Merge" upgrade, which sees a fraction of transaction fees get burnt, thus reducing the circulating supply.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
