This week the price of Bitcoin (BTC) started the week around the $11,800 mark, and after briefly surpassing $12,000 it faced a downward movement that took it to $11,200. The cryptocurrency has since been recovering and its trading at $11,870 at press time.
Ether (ETH), the second-largest cryptocurrency by market capitalization, started the week at $390 and moved up throughout it, seeing a significant movement on Thursday taking it above the $400 mark. It is now reaching $430.
This week the cryptocurrencies made headlines throughout the world after it was revealed the U.S. Government seized $2 million worth of bitcoin from 300 cryptocurrency wallets associated with fundraising campaigns from terrorist groups that were looking to obtain crypto to fund attacks.
The seized wallets reportedly belonged to three terrorist organizations: the al-Qassam Brigades – Hamas’s military wing – the Islamic State of Iraq and the Levant (ISIS). The Department of Justice said this was the “government’s largest-ever seizure of cryptocurrency in the terrorism context.” Authorities also blacklisted cryptocurrency wallets containing millions of dollars worth of cryptoassets, making it harder for their operators to cash out via centralized trading platforms.
Michael Sherwin, acting U.S. Attorney for the District of Columbia, stated:
This case is really historic and unprecedented for several reasons. We’re looking at three different entities that were targeted by the government to prevent financing going to these very dangerous terrorist organizations.
In contrast to the seizure of funds from terrorist groups, bitcoin also made headlines because of the billion-dollar business intelligence software firm MicroStrategy, which made a massive $250 million bet on the flagship cryptocurrency.
MicroStrategy announced during the week it purchased 21,454 BTC for a quarter of a million dollars as part of its two-pronged capital allocation strategy, which also included the launch of a cash tender off of up to $250 million worth of its class A common stock in a modified Dutch Auction offer.
In its announcement, MicroStrategy detailed it invested in BTC over “factors affecting the economic and business landscape,” which it believes create “long-term risks,” for its corporate treasury program.
Transaction fees on the Bitcoin network went up this month after the cryptocurrency’s price breached $10,000, as traders were looking to get in on the action. Available data shows the average transaction fee paid to transact on the Bitcoin network fell by 58% since last week, from a two-month high of $6.47 to $2.72. The drop came as activity on the blockchain started to slow down.
As the average transaction fee on the network trended down, San Francisco-based cryptocurrency exchange Coinbase released information updating the community on the results of its batching BTC transactions together.
Coinbase rolled out bitcoin transaction batching five months ago, and since then helped its customers save 75% on their transaction fees. Batching reduces the load on the bitcoin blockchain by bundling multiple transactions together.
Bitcoin’s correlation with gold also hit an all-time high this week, providing support to the narrative the cryptocurrency is a store of value, and to it being an alternative to inflation-prone fiat currencies.
$6 Billion Locked in Decentralized Finance Protocols
The latest trend in the cryptocurrency space is decentralized finance (DeFi), which now has over $6 billion locked in it. Most of the funds are locked in decentralized exchanges, or protocols that let users lend funds or take out crypto-backed loans.
The interest in the DeFi space has been such that ether transaction fees have risen over 3,500% so far this year, even though Ethereum miners increased the network’s capacity by 25% earlier this year. The ETH network has been confirming over 1 million transactions per day.
Similarly, the amount of computing power securing the Ethereum network hit a 20month high amid the surge, as more miners are incentivized to turn to ETH to collect the transaction fees being paid. Often, users find the high fees worth it for them as they are farming yield on DeFi protocols, by lending and borrowing cryptoassets while being rewarded with the platforms’ native tokens.
Crypto AM: Market View in association with