Ethereum nears deflationary status, but crypto adoption grows as Bitcoin’s mining difficulty hits ATH
Data from CryptoCompare shows that the price of Bitcoin mostly moved sideways over the past week, staying in a range between $19,100 and $19,300 with a sell-off to $18,400 being met with a rapid rise to $19,800 before BTC returned to its range.
Ethereum’s Ether, the second-largest cryptocurrency by market cap, traded in a way similar to BTC, moving between $1,270 and $1,320 throughout most of the week. ETH endured a sell-off to $1,220 at the time of BTC’s sell-off but surged to $1,350 shortly after before returning to its range.
Headlines in the cryptocurrency space this week focused on growing adoption, with a major development coming from tch giant Google, which said it will start letting some customers pay for cloud services using cryptocurrencies in early 2023 thanks to a partnership with Nasdaq-listed cryptocurrency trading platform Coinbase.
Coinbase is set to facilitate crypto payments for Google’s cloud services through Coinbase Commerce, while earning a portion of the payments made. Initially, the Google Cloud Platform infrastructure will accept cryptocurrency payments from customers in the Web3 space who want to pay in crypto, according to the vice president and head of platform at Google Cloud, Amit Zavery.
Google is also reportedly exploring how it can use Coinbase Prime, a service that securely stores organisations’ digital assets and allows them to execute trades. Zavery noted Google would “see how we can participate” in managing cryptocurrencies.
Cryptocurrency adoption also grew after the Brazilian city of Rio de Janeiro revealed it’s seeking cryptocurrency firms to operate its tax property seasoning next year, allowing taxpayers to use crypto or fiat currency to pay.
The move makes it the first Brazilian city to accept cryptocurrency payments for taxes. Companies that do provide cryptocurrency payment services to the city would be converting crypto to fiat before transferring the funds to the city.
Moreover BNY Mellon, America’s oldest bank, has announced that its Digital Asset Custody platform is now live in the United States, with select clients now being able to hold and transfer BTC and ETH with it.
BNY Mellon was founded in 1784 and has more than $2.4 trillion in assets under management. The bank formed its enterprise Digital Assets Unit last year to develop “solutions for digital asset technology, with plans to launch the industry’s first multi-asset platform that bridges digital and traditional asset custody.”
Crypto ETPs keep growing, despite bear market
Over the week Wall Street giant Morgan Stanley has revealed that the market for cryptocurrency exchange products continues to grow throughout the bear market,a sign that institutional interest in the sector remains strong.
There are currently more than 180 active cryptocurrency exchange-traded funds (ETFs), exchange-traded products (ETPs), and trusts. Half of these have been launched since the start of the bear market, with total assets dropping 70% from $84 billion to $24 billion.
Last month, trading activity among BTC, ETH, and ADA markets was relatively stronger, with each having its own narrative behind it: BTC was used as a hedge against inflation, Ethereum underwent the Merge upgrade, and Cardano had its Vasil hard fork.
Investments seemingly haven’t run dry in the space, as decentralized cryptocurrency exchange Uniswap has announced its latest raise of $165 million in a Series B funding round led by Polychain Capital.
Bitcoin mining difficulty hits new ATH
Bitcoin’s mining difficulty has hit a new all-time high after jumping roughly 13.55% in its latest adjustment. It now requires 35.6 trillion hashes to mine one bitcoin. BTC’s hashrate is also near all-time highs.
Bitcoin’s code includes a difficulty adjustment every 2,016 blocks, which are mined roughly every two weeks, to keep block confirmation steady at around 10 minutes each. The size and direction of the adjustment depend on the hashrate backing BTC.
Bitcoin’s current hashrate is roughly 264 million terahashes per second (TH/s), up from around 140 million TH/s last year. More hashrate means there’s more computing power backing the network, making it more secure.
Notably, Binance Pool has announced the launch of a $500 million lending project for private and public Bitcoin miners. The miners will need to pledge collateral in the form of physical or digital assets to get a loan.
Over the week, Ethereum’s supply dropped by around 4,000 ETH in the first deflationary turn since the Merge, which saw it move to a Proof-of-Stake consensus algorithm. Every Ethereum transaction includes a gas fee meant to prevent an overload of malicious requests on the network. Since EIP-1559, a portion of the fees is automatically burned, meaning that when the volume of gas being burned surpasses ETH’s issuance, the cryptocurrency turns deflationary.
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.