This week CryptoCompare data shows the price of Bitcoin (BTC) moved up from around $13,500 to break its resistance at $14,000 and keep moving up. The flagship cryptocurrency’s price hit $15,5000 before enduring a correction to $14,700 and moving back up to $15,450 at press time.
Ether (ETH), the second-largest cryptocurrency by market capitalization, moved from $380 at the beginning of the week to break its $400 resistance at the time BTC was surging. Breaking through its resistance helped ether hit a $465 high, before dropping back to $450 at press time.
Headlines this week were dominated by bitcoin’s price rise above $15,000. The cryptocurrency’s price is rising at a time in which Europe is entering its second lockdown and the U.S. dollar continues to weaken. High-profile central banks throughout the world, including the Reserve Bank of Australia and Bank of England have announced drastic quantitative easing (QE) plans to combat the economic threat of COVID-19.
While hold has been the defacto hedge against rising inflation, bitcoin’s position as its competitor has seen some investors strongly favor BTC. According to analysts from JPMorgan, the Grayscale Bitcoin Trust (GBTC) is outperforming gold exchange-traded funds as “some investors that previously invested in gold ETFs such as family offices may be looking at bitcoin as an alternative to gold.”
Corporate support for BTC is also on the rise, with firms like MicroStrategy and Square taking up large bitcoin positions. PayPal has announced this week it is raising its cryptocurrency buying limit to $15,000 per week, even though only 10% of its customers in the U.S. currently have access to its new crypto service.
The new crypto service, it’s worth noting, was announced last month. PayPal has started letting its users buy, sell, and hold bitcoin, bitcoin cash, litecoin, and ether.
Despite the price rise and increasing corporate support, bitcoin’s mining difficulty recorded its largest percentage decrease since the launch of specialized hardware mining. Available data shows BTC mining difficulty dropped by over 16% to 16.787 trillion, its lowest level since June.
The adjustment marked the second-largest percentage decrease of all time. Mining difficulty on the BTC network is used to measure the resources used in mining the cryptocurrency. Difficulty goes up and down at 2,016 block intervals – which occur every two weeks – and is adjusted to ensure bocks are found at 10-minute intervals.
Headlines in the crypto space this week also included the largest bitcoin seizure to date, as the U.S. Department of Justice (DoJ)seized over 69,000 BTC (over $1 billion) linked to the notorious darknet marketplace Silk Road.
The Internal Revenue Service’s Criminal Investigation unit reportedly used a third-party service to track lost funds after the Silk Road was shut down in 2013. The service led them to “Individual X,” which allegedly hacked the funds from the marketplace. Authorities took control of the funds on November 3.
Ethereum Community Prepares for ETH 2.0 Launch
The Ethereum community has been getting ready for the launch of ETH 2.0, a long-planned upgrade to the ETH network set to improve its scalability and security, by accumulating enough ether to start staking the cryptocurrency.
A deposit contract was launched for ether users to deposit 32 ETH required for staking on the network, and soon after the number of addresses with at least 32 ETH surged to a new all-time high of 126,852. A total of 524,299 ether has already been sent to the deposit contract.
The number of ETH addresses holding at least 0.1, 10, or 100 ether has also risen to record highs, while the amount of ether held on cryptocurrency trading platforms dropped to a one-year low.
Ethereum’s hashrate, the computing power being used to secure the network, hit an all-time high of 270 trillion hashes per second. Transaction fees paid to move ether have been dropping since October, as decentralized finance volumes started dropping as well.
Crypto AM: Market View in association with Ziglu