This Week in Crypto 2-12-24

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Welcome to this week’s edition of This Week in Crypto, your essential update on the latest and most significant developments in the cryptocurrency world. Bitcoin ETFs have reached a new milestone, holding over $10B in BTC. And with Bitcoin’s recent price surge, the majority of holders’ portfolios are seeing green. Meanwhile, the Ethereum network has been buzzing with activity due to the surging interest in an experimental token standard, ERC-404, leading to gas fees reaching an eight-month high. Stay tuned for an insightful journey through the highs and lows of the past week in the crypto space.

Bitcoin tops $48,000 as Bitcoin ETFs Now Hold $10B+ in BTC

Bitcoin’s price soared past $47,000, buoyed by one of the largest net inflows into U.S.-based spot Bitcoin exchange-traded funds (ETFs) since their inception, marking a significant milestone for the cryptocurrency. On Thursday, these ETFs saw their third-largest net inflow, adding 9,260 BTC to their holdings, equivalent to over $400 million, as reported by BitMex Research. This surge in investment into Bitcoin ETFs, highlighted by a standout day of inflows, underscores growing investor confidence and interest in Bitcoin as a mainstream investment option.

In a broader context, spot Bitcoin ETFs have swiftly hit the ground running, amassing $10 billion in assets under management (AUM) within their first 20 trading sessions. Leading this charge is BlackRock’s iShares Bitcoin Trust with $4 billion in Bitcoin, closely followed by Fidelity’s Wise Origin Bitcoin Fund, which manages over $3.4 billion in BTC. Despite the Grayscale Bitcoin Trust (GBTC) experiencing $6.3 billion in outflows over the past month, the overall trend towards Bitcoin ETFs remains positive.

Nearly All Bitcoin Holders See Gains as Halving Approaches in 57 Days

Bitcoin holders are currently experiencing a wave of profitability, with data from revealing that holding Bitcoin has been profitable for 96.4% of its existence, in light of its current price of $49,877 at the time of writing. This significant figure comes as Bitcoin has seen a notable increase of 17.29% in value over the last seven days. Moreover, the Bitcoin community is eyeing an important upcoming event, with the Bitcoin halving set to occur in approximately 57 days. The halving is a scheduled reduction in the rewards given to Bitcoin miners, an event that happens approximately every four years and is intrinsic to Bitcoin’s design to control inflation and the supply of new Bitcoins entering the market.

This period of profitability for Bitcoin holders and the anticipation of the halving highlight the unique aspects of Bitcoin’s economic model and its impact on the cryptocurrency’s dynamics. With the halving on the horizon, it reflects Bitcoin’s well-established system of periodically reducing the supply of new coins, a feature that plays a crucial role in Bitcoin’s market ecosystem.

Ethereum Network Sees Spike in Gas Fees Due to New Token Interest

The Ethereum network experienced a significant surge in gas fees, hitting an eight-month high, driven by the burgeoning interest in a new and experimental token standard known as ERC-404. On February 9th, the network saw gas prices soar to an average of 70 gwei per transaction, roughly equating to $60 for a standard transaction, with peaks reaching up to 377 gwei, a price point last seen in May 2023. This spike in gas fees coincides with the growing excitement surrounding the ERC-404 token standard, particularly following the launch of a project named Pandora on February 5th, which has since seen over $474 million in trading volume.

The ERC-404 standard represents an innovative approach to token design, proposing a method to link ERC-721 non-fungible tokens (NFTs) with ERC-20 tokens. This linkage aims to enable fractionalized NFT ownership, permitting multiple parties to own parts of a single NFT, and subsequently use their share for trading or as collateral for loans. According to members of the crypto community, an ERC-404 token transaction requires roughly three times the gas needed for a typical NFT transaction, highlighting the technical and economic challenges posed by this novel standard.

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