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Top Cryptocurrency exchanges experience historic volume ahead of Bitcoin’s halving

By: Crypto AM: Market View

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Image by Aleksi Räisä on Unsplash.

This week the price of Bitcoin (BTC) began rising from about $8,600 to surpass the $10,000 mark on May 8, before seeing a pullback. Over the weekend, it lost 12% of its value in 15 minutes, dropping from $9,480 to an $8,300 low, but has since recovered to $8,600 at press time.

Ether (ETH), the second-largest cryptocurrency by market capitalization, moved in a similar pattern breaching the $215 mark over the week and subsequently dropping to a $180 low, before recovering to trade at the time of writing at $186.

Bitcoin’s upcoming halving event, which will reduce block rewards from 12.5 BTC to 6.25 BTC per block, has been the centre of attention for the crypto community in recent weeks. Ahead of the event, CryptoCompare data has shown that top-tier cryptocurrency exchanges saw historic trading volumes,  with total spot volumes reaching $66.2 billion on April 30. The volume was second to only the crypto market crash on March 13th, which saw traders trade $75.9 billion worth of cryptoassets.

CryptoCompare data, however, also showed that Binance was the only trading platform to see its crypto derivatives trading volumes grow, as it traded $108 billion throughout the month. Its volumes saw it surpass other trading platforms, but the largest crypto derivatives exchanges during the month was Huobi, trading $133 billion in April,  followed by OKEx, which traded a total of $113 billion – a  31.4% drop from March.

Data from the Bitcoin blockchain shows activity ahead of the halving  is ramping up. Fees paid to miners to process transactions on the network have hit a 10-month high ahead of the halving, moving from $0.29 at the start of the year to $2.9. The rising fees mean demand for block space, which is limited to 1 MB per block on the Bitcoin network, has been on the rise.

Developer activity has also been ramping up, as in April Bitcoin Core saw a total of 510 commits, (where code is uploaded) – more than in any other month since the flagship cryptocurrency launched. 

In less positive news, a study published by the Rand Corporation, a think tank and government contractor, revealed that Bitcoin is still the dark web’s preferred cryptocurrency. In a 65-page report, the Rand Corporation examined the use of cryptocurrencies on the dark web’s marketplaces, and found 59% of listings accepted BTC, 27% accepted the privacy-centric crypto XMR, and 12% accepted Ether. In contrast, only 1% accepted Litecoin and Zcash.

It’s worth noting that the study was commissioned by the Electric Coin corporation, the organization behind the development of Zcash (ZEC). It only found three sellers accepting ZEC payments, meaning there was no “evidence of widespread illicit use of Zcash.”

The Brave browser, arguably the largest cryptocurrency-powered application by active users, has revealed that most of its users don’t actually take advantage of its crypto features. CEO Brendan Eich, during a conversation with Binance CEO Changpeng Zhao, said that out of Brave 13.8 million monthly active users, only 1.7 million were in the Basic Attention Token (BAT) ad program.

The ad program rewards users for viewing privacy-respecting ads while they browse the web in the Ethereum-based BAT token. By default, Brave blocks ads and trackers, so users have to opt-in to get rewarded with BAT. Eich added Brave is working to make the program more attractive to use and to make it “reward the user more.”

Whale Shorting BTC Vanishes

A popular Bitcoin ‘whale’ going by the name  ‘Joe007’  has vanished this week after the price of the cryptocurrency surpassed the $10,000 mark. On Twitter, Joe007 claimed it was all an “experiment” that had to end as he “can’t really afford Twitter.” While he didn’t specify why he was leaving, the whale said there were “many reasons” why he couldn’t stay.

Joe007 was a well-known bitcoin whale that held a massive short position against BTC. On the leaderboards of the popular crypto exchange Bitfinex, the trader started sitting on unrealised losses after the price of bitcoin surged. Before he disappeared from the leaderboard, he was down around $20 million in unrealised losses.

Meanwhile, users of Square’s Cash app have been buying Bitcoin en masse, so much so that revenue for its Bitcoin business surpassed that of USD business in the first quarter of this year. Out of the $306 million in Bitcoin-related revenue, however, only $7 million were recorded as profit.