Category: Cryptocurrency News

Ethereum has not been left out of the onslaught currently happening in the market. The coin has lost over 2.4% in the last 24 hours and is now trading in the $1,700 territory as of the time of writing this article. The digital asset continues to dip as the crypto market continues to experience massive losses. Ethereum has now lost over 50% from its all-time high in April when the coin had shot past $4,000. Holders continue to remain bullish on the coin as upgrades promise new and exciting things in the future of the digital asset. The coin continues to experience growing anticipation in wait for the move to ETH 2.0. Related Reading | Ethereum 2.0 Contract Reaches 100,000 ETH Milestone But now a whole other question has arisen in regards to Ethereum, and that is if the digital asset will ever become deflationary. Unlimited ETH Supply Given the structure of Ethereum, it is not a stretch to say that the digital asset does not possess any hard cap. The network is structured that for every new block created, two ETH coins are produced. Then this means that as long as people continue to use the network, then more ETH coins will continue to be created. An unlimited supply of any currency or asset puts that asset or currency at risk for inflation. Thus, Ethereum’s model remains an inflationary one due to there being no cap on the overall supply of ETH. Related Reading | Ethereum Whales Go On Buying Spree, Top 10 Addresses Now Own 20% Of All ETH This is currently the model that Ethereum runs on. But with the scheduled EIP-1559 network upgrade, this means that the network’s entire monetary policy might be changing. The upgrade is meant to curb this inflationary problem. With the EIP-1559 comes a fee-burn mechanism. This mechanism will ensure that an estimated 30% of transaction fees generated will go to the miners or validators in ETH 2.0. Then the other 70% of the transaction fees will cease to exist, or in easier terms, the coins will be burned. This means that instead of two new ETH coins being produced for each new block created and adding to the current Ethereum supply on the market, the base network fees will be going towards removing them entirely. What This Means For Ethereum This mechanism will reduce the number of new ETH coins coming into the market and getting sold. It will drastically reduce the supply of new coins, hence trying to make the digital asset deflationary. This mechanism works and adjusts according to the current network activity at any given time and is dependent on block space. Given this, there is no way to tell how much Ethereum will be burnt over time after this mechanism is implemented. Related Reading | How Ethereum Can Reach $2 Trillion In Market Cap, Matthew Sigel In addition to this, the burn rate could end up being much higher than the issuance during times of high congestion. This, in turn, could end up leading to a liquidity crisis in the network as too much ETH gets burnt. Holders of the digital asset remain unfettered by this though. Ahead of the ETH 2.0 complete upgrade, over 6.3 million ETH coins have been staked in the ETH 2.0 deposit contract. Representing over 5% of the current Ethereum supply locked ahead of the upgrade. Ethereum price continues to trade below $2,000 | Source: ETHUSD on TradingView.com Forecasts remain that this number will grow even more as the upgrade which is scheduled for 2022 is still a while away and this gives more investors time to get in on staking. Holders have also staked about 9.34 million ETH in DeFi and are currently earning yield on various DeFi platforms from their staked ETH. As the upgrade draws nearer, it is only a matter of time before it will be apparent how this will affect the monetary policy of Ethereum. Featured image from Cryptocoin Spy, chart from TradingView.com

Payments giant Mastercard has announced that its crypto card program is being enhanced for cryptocurrency wallets and exchanges. The company said, “Making the process simpler will allow more banks and crypto partners the opportunity to offer their consumers the choice of paying with cryptocurrency.” Mastercard Making It Simpler to Convert Cryptocurrency to Traditional Fiat Currency […]

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Bitcoin broke below its support zones and trades around its yearly open after another massive selloff. At the time of writing, the first cryptocurrency by market cap trades at $29,605 with an 11.2% loss in the weekly chart. The crypto market has followed Bitcoin, except for a handful of coins, and the top ten sit on more pronounced losses. For three consecutive months, BTC and major cryptocurrencies have been in the red. May and June saw two capitulation events that pushed BTC’s price below its current levels. Hence why so many investors and traders expect further downside to consolidating a third and possibly final capitulation. The weeks leading to the most recent crash saw Ethereum (ETH) outperforming Bitcoin (BTC). The second cryptocurrency by market cap rose from around $1,600 to $2,390 before retracing to current levels. However, a recent report by Arcane Research concluded that BTC remains the best performer in the crypto market. In consequence, the BTC Dominance has increased as altcoins are pushed further down their support levels. As seen below, the Bitcoin Dominance stood at 46.92% by the time the report was published with ETH following with a 16.96%. USDT (5.12%), BNB (3.72%), ADA (2.86%) taking on XRP (2.05%) and DOGE (1.82%) positions. The chart shows that Bitcoin retraces around 11.2% since the beginning of July 2021. Cryptocurrencies with large market caps saw the less severe drops with only 18.5% closely followed by small-cap tokens with 19.6%. Mid-cap cryptocurrencies took the biggest fall with a 22.4% drop. Arcane Research said: (…) All indexes have now seen considerable negative monthly returns three months in a row. In May, all indexes saw negative returns of around 30%. In June, the monthly returns ranged between -5% for bitcoin to        -28% for the Small Cap Index. This month, we’re currently on the path towards another month of substantial negative returns for the broad crypto market. Bitcoin Derivatives Experience Rise In Open Interest Arcane Research also registered a decline in volatility for the 7-day chart. This metric stood at 1.68%. The last time Bitcoin experience such low volatility was in October 2020. Conversely, the BTC-based derivatives have seen an increase in Open Interest (OI). The Bitcoin futures have been playing a major role in the market’s dynamics. The first capitulation event was preceded by a high OI with a spike in liquidations when BTC turn to the downside. This metric was on a decline but is moving towards April and May highs, Arcane Research said, with 395,000 BTC. This represents a 95,000 BTC increase since OI touched a bottom at the end of May. In the coming weeks, the market could see further movement due to the recovery in the Bitcoin hashrate and the implementation of Ethereum’s EIP-1559 with the London Hardfork.

On July 20, the CEO of Circle Internet Financial LLC., Jeremy Allaire, published a blog post that explains the firm’s dollar-pegged stablecoin is backed by “prioritized trust, transparency, and accountability.” Allaire’s blog post follows a letter from the Centre Consortium’s accountant, Grant Thornton explaining that the stablecoin’s reserve account information matches the accompanying reserve account […]

The Bank of Canada suggested that a Canadian CBDC could provide a number of innovations, including the elimination of transaction fees from debit and credit cards.

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