Bitcoin has been hit hard in recent weeks by the financial turmoil kicked off by the spread of Covid-19 and market fears over the resulting economic fallout.
But don't cry into your beer (or coffee, or kombucha, or whatever) long-term bitcoin holders: Ethereum's ether (ETH) token has done even worse this month, despite an uptick in on-chain activity.
While bitcoin (above) is down 32 percent on a month-to-date basis, the price of ether (below) has declined by 44 percent.
The cryptocurrency cratered as low as $89 on March 13, according to CoinDesk's data. However, while ether's price has dropped, the cost of gas, required for transactions and computations on the network, continues to rise.
Despite the price volatility, more activity is happening on the Ethereum network, meaning higher gas fees. Meanwhile, mining in the form of the daily average hash rate for Ethereum is going down. Gas doesn't really mean much for Ethereum miners, but ether's price does.
So ether price is down, and so is mining. That makes sense – the lower the price, the lower the mining reward and therefore the incentive to mine the cryptocurrency. But why are gas fees going up? A look at what those gas fees are being used for might help when understanding transactions.
ERC-20 transactions have eclipsed ether transactions – and it's been that way since mid-2019. Why? Because of stablecoins, and, in particular, Tether's adoption of the Ethereum network in 2019.
It's hard to be bullish right now, and ether in particular is a dangerous case. Beware those claiming transactions on the rise within the Ethereum network is some kind of positive sign. It's only because of an increase in the usage of stablecoins on the network during these very uncertain times.
– Daniel Cawrey
Coinbase Broke Traffic Records and Saw Massive Volume
The San Francisco-based crypto exchange said it processed $2 billion in cryptocurrency March 12-13 amid the market collapse in price. The platform has been getting ready for this since the 2017 bull run. Where other platforms experienced issues and outages, CEO Brian Armstrong noted that Coinbase remained operational, saying the exchange has been preparing for a crisis “for the last couple years."
Bitcoin Bumps Up, but for How Long?
Cryptocurrencies have seen an upswing in both price and volume. How long will this new rally last? “Conditions look set for a stellar rise with unprecedented monetary easing and fiscal stimulus along with the halving narrative. So once there was a sense of some stabilization in the spread of the virus (0 cases in China yesterday) a frenzy of buying occurred,” QCP Capital’s Darius Sit told CoinDesk.
Customized Crypto Options Seeing Record Demand
The Hong Kong-based GSR, which offers market making and over-the-counter trading says structured products are becoming a fast-growing part of their business. "The pandemic has predictably sparked a rise in trading activity, but it’s only adding to what has been a substantial shift towards risk management in 2020," said GSR co-founder Rich Rosenblum.
The Puell Multiple Is Turning Bullish on Bitcoin
Bitcoin hit 12-month lows below $4,000 in March. With the price slide, a key indicator called the “Puell Multiple” has declined to levels suggesting the value of newly issued bitcoins on a daily basis is quite low compared to historical standards. Calculated by dividing the daily issuance value of bitcoins in U.S. dollar terms by the 365-day moving average of the daily issuance value, it suggests BTC is undervalued.
Tether Stablecoin Launches on Its Seventh Blockchain
Announced last week, Tether is using the Simple Ledger Protocol as the technical means to launch its stablecoins on the Bitcoin Cash blockchain. Aiming for the token's price to consistently match the U.S. dollar on a 1:1 ratio and backed with assets, Tether is also on the Algorand, EOS, Ethereum, Liquid Network, Omni and Tron blockchains with a total market capitalization over $5.6 billion.
LISTEN: Continuing Rally?
Hosts Adam B. Levine and John Biggs talk about bitcoin's rallying potential, deploying open source data to fight coronavirus and using ethereum mining power to figure out a cure for COVID-19.
Crypto Lender Cred Is Offering Investors 10% Interest
Spencer Dinwiddie, a Brooklyn Nets guard, is the NBA’s most outspoken cryptocurrency and DeFi enthusiast. In a partnership with crypto startup Cred, investors can “pledge” TrueUSD and UPUSD stablecoins as well as bitcoin, litecoin and ether, earning up to 10 percent interest. The return is on a volatility-free crypto asset: stablecoins backed one-to-one with dollar reserves.
Tweet of the Day
In the face of roiling markets, nothing is performing all that well. The stay-at-home mandate for many people across the world is boosting Netflix. Elon Musk's proclamations to relax on Twitter (including an attempt to defy stay at home orders to keep Telsa's factories open) are likely contributing to gains in its stock. However, as investor Alistair Milne points out, there're just aren't many winners YTD.
Trend: Bitcoin continues to trade within the range of a big doji candle created March 20, signaling indecision in the market place.
The global stock markets are again flashing red as fears of a coronavirus-led global recession have been fed by the US Senate's failure to push forward a massive rescue package.
With equities under pressure, bitcoin could end the period of indecision with a move below $5,000. However, key metrics like the Puell Multiple and MVTV Z-score signal the cryptocurrency is undervalued. Additionally, demand from long-term investors is likely to be strong under $5,000, according to Mike Alfred, CEO of Digital Assets Data.
As a result, dips below $5,000, if any, could be short-lived. On the higher side, the March 20 high of $7,139 is the level to beat for the bulls.
Here’s How To Predict Major Moves In The Price Of Bitcoin (Forbes) Bitcoin and cryptocurrency investors are keenly watching for any signs of further volatility with one analyst pointing to "large increases in exchange inflows" as heralding extreme bitcoin price moves.
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
Ethereum: Is a Rise in Transactions a Good Sign for Price?