Innovation Stocks “Nowhere Near A Bubble,” ETH “Even More Undervalued Than BTC,” – Cathie Wood

“Here we are, ready for primetime, and we got all this fear and uncertainty and doubt. As a portfolio manager, I actually love that backdrop,” said Ark Invest, CEO.

Cathie Wood, founder, and CEO of Ark Investment Management, said Bitcoin could soar to $500,000 as institutions increase their allocation to the leading cryptocurrency by as much as 5%.

“Institutions are moving in,” Wood told CNBC.

“To some extent, this is a new asset class with correlation very different compared to other asset classes. Institutional managers have to look at new asset classes that are evolving and that have low correlation. That’s the … Holy Grail in terms of asset allocation.”

Just this week, Michael Saylor’s MicroStrategy announced that it had purchased another 1,434 Bitcoin for $82.4 million.

This latest purchase was made at an average price of ~$57,477 per bitcoin, while at its current prices, BTC is down 16% from that level. With this, the average Bitcoin entry of the company is $29,860.

MicroStrategy now holds a total of 122,478 BTC, acquired for $3.66 billion.

Ready For Primetime

Bitcoin, meanwhile, is back under $50k ahead of US inflation figures. Traders seem to be already pricing accelerated tapering and an increase in rates with the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan to meet next week.

The risk aversion can also be seen in the stock market, and in tandem, the crypto market is falling today while the dollar continues to trade near a 17-month high. Even gold is getting hammered, trading at $1,770 per ounce.

As of writing, BTC is trading around $48,000, unable to make a strong recovery from last weekend’s sell-off.

ARK Invest’s flagship fund is currently down 19% YTD and has fallen 36% from its record high in February. While some say that these innovation stocks are in a bubble, Wood said, she “couldn’t disagree more.”

“What I like about this period is many people are saying those stocks were in a bubble and they deserve to correct. That tells me we are nowhere near a bubble.”

In fact, following such a correction, Ark’s 5-year compound annual rate of return expectation has gone to nearly 40% today, from 15% at the peak in March, she said. This means Ark expects the innovation stock to quadruple from current levels over the next five years.

“Here we are, ready for primetime, and we got all this fear and uncertainty and doubt. As a portfolio manager, I actually love that backdrop.”

Miles To Go

Talking about BTC, Wood reiterated that the cryptocurrency could go 10x from its current level.

“The move actually by institutions into Bitcoin, if we were to choose Bitcoin and that seems to be their first stop, could add $500,000 to Bitcoin’s price if they move into roughly 5% over time.”

Much like Wood, Mike McGlone of Bloomberg Intelligence says the coin is a risk asset that’s slowly evolving into a digital-reserve asset “in a world going that way,” which should have positive implications for its price.

“The key question nearing the end of 2021 is whether Bitcoin is too hot,” McGlone wrote in a note.

“Our chart shows the crypto fairly priced at about its upward-sloping 50-week moving average.”

Meanwhile, Wood is not only bullish on Bitcoin but also Ethereum, and at its current levels, it could be more underestimated. Ether is currently hovering above $4,000. ETHBTC meanwhile is at 0.0847, down from the 2021 high of 0.886 hit on Thursday.

ARK is “working on” a price target for Ether “right now,” said Wood adding, “the fact that it is the venue, or the protocol, for DeFi and for NFTs suggests to us that it is even more undervalued than Bitcoin is, just because there are new worlds growing up on top of it,” Wood told Fortune on Thursday.

While Ethereum is “in its infancy” and has “miles to go,” she said Bitcoin is “primarily a monetary system.”

As such, she expects institutions to not only move further into Bitcoin but also Ether because of DeFi, a move she thinks is “going to accelerate,” and NFTs.

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Author: AnTy

Bitcoin Breaks Through $61,000 as Euphoria & ‘Greed’ Brings the Money Back In

Bitcoin is on the move, and it looks like there’s isn’t much resistance from here to the $65,000 all-time high.

Today, we went on to hit almost $61,500, and Bitcoins’ market cap surpassed $1.15 trillion. Currently trading above $61k, another move, and we’ll go straight for ATH. The leading cryptocurrency is now up more than 37% in October, so far.

This latest euphoria in the market is due to the first Bitcoin ETF of the US finally coming next week.

“ETFs open up a raft of avenues for people to gain exposure, and there will be a swift move to these structures,” said Charles Hayter, CEO of data firm CryptoCompare.

“It reduces the frictions for investors to gain exposure and gives traditional funds room to use the asset for diversification purposes.”

As we reported, there are very high chances that a Bitcoin Futures ETF would officially be trading before this month is over. Even the SEC is reminding investors to be careful when investing in a fund holding Bitcoin futures.

While ProShares Bitcoin ETF’s deadline for approval, decline, or delay is coming on October 18, Valkyrie filed an 8-A on Friday. SEC has to decide on Valkyrie’s ETF on October 25.

This is “yet another step indicating they (Valkyrie) think they will be going effective. That said, I’m still waiting on ProShares’ updated prospectus to get that ‘home free’ feeling,” said Eric Balchunas, a senior ETF analyst for Bloomberg.

Earlier today, Bloomberg also reported that the SEC is set to allow the Bitcoin ETF to trade next week, citing people familiar with the matter.

“It’s one of the final frontiers for mandate access,” said Joseph Edwards, head of research at crypto broker Enigma Securities.

“Plenty of Americans in particular have strings attached to how they deploy a lot of their wealth. It allows bitcoin to get in on the sorts of windfall that keep U.S. equities as consistently strong as they are.”

The approval of the ETF would certainly print a new ATH for Bitcoin.

“The move to $1m is preordained,” says Su Zhu, CEO, and co-founder of Three Arrows Capital.

In anticipation of the move, open interest on Bitcoin futures has increased to $22.29 billion, last seen in mid-April, according to Bybt. On CME, OI has already hit a new ATH at $3.36 billion, surpassing the February 21 high of $3.26 billion. As of writing, Bitcoin futures are trading at $60,950 on CME.

Funding rates on Bitcoin perpetual contracts are also spiking. Last month, it was negative, and currently, the highest is at 0.0446% on Deribit.

Additionally, the Crypto Fear & Greed Index is showing that ‘greed’ sentiments are back in the market with a reading of 79, last seen in late August.

In tandem with Bitcoin, Ether went up to trade above $3,800 while the total cryptocurrency market cap hovers around its early May peak of $2.55 trillion.

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Author: AnTy

Cleansing or Reversal? Over-Leveraged Apes Get Punished and Funding Resets as OI Drops Over 21%

Now that the market has reset, participants are expecting to go higher from here, with funding turning negative and exchanges broken as people try to get their hands on the dip.

The flash crash on Tuesday wiped out more than $380 billion from the cryptocurrency market, with Bitcoin falling to about $42,000 and Ether going under $3k. After bouncing back to $47k and $3.5k, BTC and ETH are now hovering around $46k and $3,400.

According to Delphi Digital, “a negative feedback loop of liquidations seems to be the primary cause, as the market punished over-leveraged apes.”

On Sept. 7, $3.5 billion were liquidated. But with the price not yet stabilized, in the last 24 hours, 353,908 traders have been liquidated for $3.46 billion — the most since May 19.

Bybit accounted for 35.7% of these liquidations at $1.33 billion, followed by Huobi at 23%, $860 million. Binance’s share was 21.3%; however, given that they don’t report the correct numbers, liquidations on the leading cryptocurrency exchange are more than likely much higher than the Bybt recorded $792 million.

The majority of the exchanges had 85% to 99% of these liquidations coming from longs, while only Deribit and FTX had a good 48.32% and 30.37% coming from shorts.

With so much leverage wiped out of the market, open interest on the exchanges also took a hit.

Bitcoin futures contracts saw a loss of $4.18 billion in OI, going back to the early August level. As for Ether, the OI has fallen to $8.37 from the all-time high of $11.62 on Monday.

On CME, OI on Ether is at $709.5 million, a level that was seen on Sept. 1st and still much higher than the May high of $607.88 but down from $860.75 million ATH. As for Bitcoin futures, OI is $1.51 bln, down from $1.88 bln on August 29th and $3.26 bln peak from Feb 26.

As Delphi Digital noted, “High open interest can be seen as traders starting to open more futures positions, most often with some amount of leverage.”

As a result, the long-term funding trend has reset to 0.05%, much lower than the prior peaks of 0.20%. Low funding implies a balanced demand, not skewed towards longs or shorts.

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Before the crypto carnage happened on Tuesday, futures traders were eyeing further upside as seen in rising basis premiums which suggested a growing bullish sentiment among the leveraged traders.

When the $50k breakout occurred, the futures’ basis finally moved upwards last week after more than a month of no developments in the futures market. In the offshore futures market, the basis saw a sharp rise — on FTX, it went to 14% after trailing around 8-10% throughout August, while on CME, it grew far less rapidly.

But now, the liquidation has provided the market with “a meaningful leverage reset.”

Now that the market has reset, participants are expecting to go higher from here, with trader Light saying,

“32% haircut to total derivatives open interest, funding structure reset after an orgy of a long weekend. Buying versus forced sellers is almost always a good strategy. If had to guess, dip feels more like a cleansing than a reversal.”

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Author: AnTy

Driven by Real Demand Bitcoin Hits Resistance but Retail and Speculator Euphoria Is Not Here Yet

Technical obstacles are here with consolidation expected around $51,000 while the possibility of Fed tapering risk has been pushed back has greenback falling and US dollar net longs declining by more than half.

Bitcoin has finally hit $50,000 after three months.

As of writing, the leading cryptocurrency is trading just under $50k, finding resistance at this psychologically important level.

“We’re seeing some very bullish signs here,” said Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno in Singapore. Bitcoin could “test all-time highs again” after pushing past levels that have seen some major challenges.

The rally is now overcoming a confluence of hurdles, including a Fibonacci and Ichimoku cluster between $47k and $48k. Besides $50k being a round number, the 61.8% Fibonacci retracement of the April to June downtrend presents a potential obstacle at $51,000.

“The next major resistance, for now, is at the $50,000 zone,” said Konstantin Anissimov, executive director at CEX.IO crypto exchange.

“Should more buyers dive in to push the price above the $50,000 level, a frenzy may be ushered in to steer the price toward a medium-term target of $55,000.”

Appetite Must Remain Intact

As Bitcoin’s market cap inches closer to $1 trillion, the total cryptocurrency market capitalization is currently at $2.23 trillion, fast approaching the mid-May peak of $2.6 trillion propelled by the gains of AVAX, LUNA, RUNE, AR, SOL, and ADA in the last 30-days.

The latest uptrend is marking the end of a months-long slump after crypto-assets peaked in April and May, driven by profit-taking and China’s crackdown on cryptocurrency mining and leveraged trading.

According to Edward Moya, senior market analyst at OANDA in New York, the fears of capital gains taxation have led some traders to hold cryptocurrency as a long-term investment as well.

“New investors are the key to this latest bitcoin rally, and all signs show they are comfortable with high risk.”

“Bitcoin could see a fast appreciation here and might not hesitate making a run for $60,000 if appetite for risky assets remain intact.”

USD Giving Back Its Gains

Investors are also betting on the prospect of more US stimulus spending that would lead to further gains amidst the growing adoption of cryptocurrency among mainstream financial services firms.

With Dallas Federal Reserve President Robert Kaplan, a well-known hawk, saying he might reconsider the need for an early start to tapering as concerns over the outlook for global growth due to the Delta coronavirus variant, USD slipped on Monday.

The greenback saw some profit-taking after registering its biggest weekly rise in over two months, currently around 93 after climbing to Nov. 2020 levels on Friday.

Last week, US dollar net longs also declined to $1.06 bln, from $3.08 bln in the previous week after the USD positioning was net long for five straight weeks, which came after staying net short for 16-long months.

Markets are expected to experience some volatility in the coming days, with Fed Chair Jerome Powell to speak about the economic outlook at the central bank’s Jackson Hole Aug.26-28 conference.

Tapering Pushed Back

The possibility of Fed tapering risk pushed from Sept. to December has QCP Capital maintaining a bullish bias against the 40k support level in BTC. Also, Governor Lael Brainard’s latest dovish pivot to become Fed chair is “likely to raise enough questions within the FOMC to delay their decision by a quarter.”

Not only is headline regulatory risk exhausted in the near-term, the funding rates in perpetual swaps and premium in the futures is also low and muted, meaning “most of the rally has been driven by demand in physical spot rather than from leveraged speculators.”

With no signs of overheating or overextension, QCP is bullish but not overly so due to GBTC still trading at a discount. In the meantime, consolidation is expected at $51,110.

However, NFTs are drawing the attention of retail and institutions alike. And as retail investors return to the market, another upswing could see crypto prices rallying to new heights.

Given the fact that the last time BTC was at $50k, the Google trends for Bitcoin searches were much higher than what it is right now, “this suggests that retail euphoria hasn’t entered the market yet, and bitcoin has a long way to go in this market cycle,” said Marcus Sotiriou, a sales trader at the UK based digital asset broker GlobalBlock, in a note.

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Author: AnTy

Former US Treasury Secretary says Crypto is “Here to Stay” as a “Kind of Digital Gold”

Former US Treasury Secretary says Crypto is “Here to Stay” as a “Kind of Digital Gold”

According to Lawrence Summers, “Crypto has a chance of becoming an agreed form that people who are looking for safety hold wealth in.”

Former US Treasury Secretary Lawrence Summers is a believer in crypto, and yet again, he came in its support as he said that it could be a feature of the global market like “digital gold” even if their importance in economies will be limited.

Cryptocurrencies offer an alternative to gold for those seeking an asset “separate and apart from the day-to-day workings of governments,” said Summers in an interview with Bloomberg.

Summers is on the board of directors of Square Inc.; the payments company revealed in its Q1 2021 results that its sales more than tripled, driven by skyrocketing Bitcoin purchases through its Cash App.

“Gold has been a primary asset of that kind for a long time,” said Summers, who believes crypto “is here to stay” and could do that “as a kind of digital gold.”

“Crypto has a chance of becoming an agreed form that people who are looking for safety hold wealth in.”

If the crypto captures even a third of the total value of gold which has a market cap of around $10 trillion, Summers said that would be a “substantial appreciation from current levels,” and that means there’s a “good prospect that crypto will be part of the system for quite a while to come.”

With Bitcoin’s current market cap around $683 billion, achieving gold’s market cap would have its price appreciating around 14-fold or more.

Yassine Elmandjra, a crypto analyst at Cathie Wood’s Ark Investment Management, is of a similar opinion and said earlier this month that if that is to happen, “it’s not out of the question that Bitcoin will reach gold parity in the next five years.”

Summer meanwhile said that cryptocurrencies do not matter to the overall economy. According to him, they were unlikely to ever serve as the majority of payments either.

Reiterating his worry about the US economy risking overheating in the interview, Summers said the Federal Reserve should be more aware of the inflationary threat.

“I don’t think the Fed is projecting in a way that reflects the potential seriousness of the problem,” he said. “I am concerned that with everything that’s going on, the economy may be a bit charging toward a wall.”

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Author: AnTy

SushiSwap Launches A ‘Game-Changer;’ BentoBox’s 1st DApp Is Kashi Lending & Margin Trading

SushiSwap’s decentralized “App Store,” BentoBox, is here with gas optimization and the “revolutionary innovation in L1” that is Kashi, along with a proposal of a partnership with Red Bull Racing.

  • SushiSwap has announced the release of its latest product BentoBox and “Kashi Lending & Margin Trading” on it.
  • The market believes this to be really valuable to SUSHI which is an ecosystem offering AMM, lending, and now margin trading capability while token holders collect 50 bps on all fees.

According to a Managing Partner at Blockhead Capital, which is long on Sushi, unlike Uniswap, “SUSHI is a defi *ECOSYSTEM* not just an AMM, & the team seems committed to launching more apps. Its severely undervalued & rational investors would size accordingly.”

Trading at $16.48, Sushi is a $2.1 billion asset, while Uniswap has a $14.75 billion market cap as its token UNI trades at $28.55.

Adding to the excitement is the proposal of a four-year partnership agreement from Spring 2021 until Spring 2025. There are two separate packages for this, one for $21 million that involves the Sushi logo on the chassis of the Formula 1 cars, heavily promoted on social media, naming rights to the RBR campus in Milton Keynes, England, and hosting a full-time tech incubator on campus.

The partnership of $46 million involves all the branding opportunities and a lot more, including NFT/ Social Token, sponsoring a Red Bull Stratos level event in 2023, Sushi Bars at Formula 1 races, and direct sponsorship of the RBR technology campus.

Decentralized “App Store” is Here

Today, SushiSwap announced the formal release of BentoBox on SushiSwap along with the first lending and margin trading solution, Kashi, which the team says “delivers revolutionary innovation in L1.”

BentoBox has been defined as a “game-changer” and described as a vault that serves as a decentralized “App Store” to deposit assets to enable other Dapps.

Kashi, the Japanese word for lending, is the first Dapp within BentoBox that allows users to create lending token pairs.

Bento, here, stores tokens and generates yield from flash loans and strategies for protocols built on them. So, Bento holds the tokens, and Kashi utilizes those assets for lending, borrowing, and one-click leverage trading transactions. The team states,

“Kashi’s main purpose will serve to offer margin trading for a large variety of tokens that are not yet currently widely available for shorting.”

The margin trading solution uses an elastic interest rate with a target utilization rate of 70–80% for V1, meaning over 70% of a certain asset is expected to be used for flash loans at any given time.

By eliminating an unnecessary number of transactions, it lowers the overall gas fees, and this is the jackpot right here. Fees on the Ethereum network have been sky-high since last summer when DeFi exploded into the crypto scene.

As the Sushi team itself says, “With gas optimization on everyone’s minds, we know this is music to everyone’s ears.”

Sushi further offers the ability to maximize token usage and earn extra revenue by allowing the assets on Bento to be also used to provide flash loans, two things at once. Basically, “assets are never sitting idly at an opportunity cost.”

Kashi V1 is released today with a selection of primary lending pairs to take a stab at its margin trading without having to put up their own collateral. Supported token lending pairs are ETH/WBTC, SUSHI/ETH, ETH/UNI, AAVE/ETH, YFI/ETH, LINK/ETH, and ETH/COMP.

The latest product launch came with the hype of Kashi V2 already, which is coming soon with adding UI for liquidations powered by flash loans, activation of new lending pair creation interface, and allowing users to select their own oracles.

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Author: AnTy

Chinese New Year, the Year of Ox (Bull), is Finally Here as Crypto Market Aims for the .5 Trillion Mark

Chinese New Year, the Year of Ox (Bull), is Finally Here as Crypto Market Aims for the $1.5 Trillion Mark

The bullish tailwinds for the Bitcoin market hold strong with negative rates, bond purchases, fiscal stimulus, a weaker dollar, mainstream adoption in this year of bull.

Chinese New Year is finally here. The festival celebrated around the world on Friday marks the beginning of the Lunar New year. The Chinese New Year is also called the Spring Festival.

Each year has an animal sign in the Chinese Zodiac, and this is the year of Ox. As an analyst, Mati Greenspan says, “The qualities of this particular four-legged animal are not so different from those of bitcoin itself,” very slow and steady paced but moves only forward and with a sense of purpose.

The crypto market has already been enjoying an uptrend ever since last year, with the overall market cap ready to hit $1.5 trillion, as per CoinMarketCap.

While Bitcoin seems primed for $50k, the fully diluted market cap of the leading cryptocurrency has already surged past the $1 trillion mark. The reported market cap still has a way to go, as the highest level was hit on Friday at $898 billion.

Going forward, Bitcoin is “quickly approaching the two-year MA multiplier upper resistance, currently at $56k,” as per trader Josh Olszewicz. “Ideally, we tap somewhere near $56k, slow down a bit, reconsolidate at the midline, then make the move past the resistance (ala 2017),” he said.

Bullish Tailwinds

Bitcoin hit a new ATH at $49,000 this week as the institutional adoption of the market continues to grow with more and more people and companies embracing cryptocurrencies.

With the names like Tesla, BNY Mellon getting in, it is expected to lay down the groundwork for even more mainstream adoption of cryptos.

The weakness in the dollar also helps the markets, currently around two-week lows after the release of weaker-than-expected weekly US jobless claims data, which is denting investors’ expectations about the pace of the economic recovery. Westpac strategists wrote,

“The U.S. economy will outperform most thanks to fiscal stimulus and faster vaccine deployment, but ongoing reflationary fiscal and monetary policy will leave DXY on a sustained medium-term bear trend.”

This week, as we reported, the Bank of Japan has been signaling its readiness to take interest rates deeper into the negative territory. European Central Bank is also planning to keep the fiscal spending going in 2022.

Federal Reserve Chairman, Jerome Powell, also said on Wednesday that continued aggressive policy support is needed to fix the issues like the dour state of the US employment. Powell said in a speech to the Economic Club of New York,

“Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared.”

The Fed has signaled that it expects to hold rates near zero at least through 2023, and Powell repeated that the central bank’s $120 billion monthly paces of bond purchases commitment would also continue until “substantial further progress” is recorded on employment and inflation.

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Author: AnTy

ETH Exchange Balance at Two-Year Low While Skew Deep into Negative Territory

The weekend is here and so is red.

The cryptocurrency market is seeing a slight correction with ETH going to $455, down from yesterday’s high of $477.

At the time of writing, Ether has been trading at $460 in the red, with 250% year-to-date performance.

The good thing is the percentage of total ETH being held on exchanges is currently at 13.35%, a low last seen on November 23, 2018, as per Santiment.

“The almost exact two-year milestone is a positive sign for Ethereum holders, who have historically benefited when supply held off of exchanges is kept low.

It indicates that large whale selloff probabilities will remain limited.”

Also, “strong demand” is seen for ETH options calls, which are the right to buy the underlying asset.

While the price of Ether is taking a breather here, so are the DeFi tokens which rallied strongly this past week, as Bitcoin stood strong above $16,000 but didn’t move much.

As the price of BTC drops to nearly $15,700, so have the altcoins, ETH, and DeFi tokens except for the likes of Hakka (26%), Hegic (16%), Sushi (12%), and Uniswap (11%).

Overall, the total value locked (TVL) in DeFi space hit a new all-time high today at $13.95 billion, as per DeFi Pulse.

The amount of ETH locked in the sector has also been on the move this past week, nearing the ATH at 8.9 million ETH.

While the ETH locked in DeFi are seeing an increase, those locked in for ETH Phase 0 slowed down, only reaching the 12.1% of the goal.

In its latest update, the Ethereum Foundation noted that with the genesis time set for Dec. 1st, 12 pm UTC, the community has to get their deposits on-chain before November 24, 12 pm UTC.

The deposits contract for ETH 2.0 was launched ten days back along with the mainnet launch Pad.

Yesterday, developer Danny Ryan also updated on the launch of Toledo devnet, a 16k validator testament with v1.0 mainnet configuration. Next week, the aim is to launch Pyrmont, 1 100k validator testnet mimicking mainnet conditions.

“Once Pyrmont is launched and stable, the testnet will be opened up to the community. Pyrmont can serve as a final place to test mainnet software releases and hardware setups in the run-up to mainnet launch.”

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Author: AnTy

Litecoin MimbleWimble Testnet Launched, Privacy Will Finally be Here in 2021

Litecoin MimbleWimble testnet is here, which will bring privacy to the network. Scheduled for launch on Sept. 30, not many participated in keeping it running as such MimbleWimble testnet has been relaunched. The protocol is designed to enhance privacy and obfuscate the traceability of distributed ledger transactions.

Only a few nodes connected and mined, so not “enough blocks to activate mimblewimble yet,” but as more peers get onboard, they will be able to activate the testnet, said Grin developer David Burkett who has been working on this implementation.

MimbleWimble is a modified implementation of the proof-of-work (PoW) algorithm that underpins Bitcoin. In this, blocks appear as a single large transaction, preventing the individual inputs and outputs of a transaction from being identified. Burkett also wrote,

“I’m still roughing in very minimal cli wallet support, but hopefully we’ll have a simple way to create mimblewimble transactions by the time it activates.”

Despite this news, LTC failed to pump and continues to trade around $46, down 87.55% from its all-time high. One of the worst performers of 2020, LTC saw returns just about 8.65% YTD.

Now that “Mimblewimble Extension Block” (MWEB) testnet is working, the developer will be focusing on making it easy for non-technical Litecoin users to test it out as well — this means wallet support, automated builds, and better documentation. He said,

“Once I’m confident everything is working as designed, I’ll start looking for ways to break the testnet, to make sure we find and resolve any security or stability weaknesses.”

Burkett also stated that next month, he would share a detailed plan about the remaining work required to get MWEB merged to the main repo, so that node operators and miners can start signaling for activation sometime in 2021.

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Author: AnTy

Ethereum Miner Fees Beats August Record with a 47% Increase in September

The final quarter of 2020 is here after seeing the tectonic shifts over the last few months, such as the rise of the DeFi and capital flow from the crypto sector to this burgeoning one, specifically into DEX venues and yield farming offerings.

And of course, Ethereum is at the center of it all.

The second-largest cryptocurrency network ended the quarter at 60% returns, much higher than Bitcoin’s mere 18%. However, September wasn’t good for the crypto market, which saw Ether also declining by 18%.

At the time of writing, ETH has been trading around $365, up 2.25%, and over half a billion dollars in ‘real’ trading volume.

But what has been more interesting was the effect of DeFi’s capital flow on Ethereum’s fees.

According to the data published by Glassnode, Ethereum miners made a total of $166 million from transaction fees in last month — a new all-time high.

September’s miner fees have been an increase of 47% from the previous high in August.

Compared to Bitcoin, whose miners made $26 million from fees, Ethereum’s has been over 6x of it.

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While the revenue from fees has been filling the pocket of Ethereum miners, it has made it all a big players’ game, shutting out the smaller ones.

However, it did put the layer 2 solutions in the limelight that is being actively used by popular DeFi projects. Ethereum co-founder Vitalik Buterin, an advocate for these solutions, recently said they make the main network a good choice for payments.

The bullish thesis for Ethereum also involves the recent launch of “Spadina,” the final testnet ahead of the blockchain upgraded ETH 2.0 mainnet release. This testnet is to run for three days as a “dress rehearsal” after the Medalla testnet went live last month. Spadina is to run alongside Medalla and test deposits and genesis block.

Scheduled to go live on Sept. 30, Spadina ran into problems yesterday. It suffered from “a lack of finality at launch,” as per Prysm Labs, which has been because of very few Prysm nodes participating, leading to community confusion. Other issues included users sending invalid deposits and “overall loss of confidence in becoming an eth2 validator.”

But this could be all fixed easily with a release, and everyone has to try again. ETH 2.0 testnet is now scheduled for another dress rehearsal called Zinken, next week.

For this to be successful, the developer Danny Ryan said everyone needs to take the genesis seriously.

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Author: AnTy