Ethereum’s gas off

January 12, 2024

 

Reading time: 7 minutes

Bitcoin sees influx of new buyers post-spot ETF approval, fueling anticipation for bull run

Key points:

  • As per Coinglass data, the BTC Open Interest on CME was close to $6.4 billion at the time of writing

  • Securing the second and third spots, Binance recorded over $4.2 billion, while Bybit followed closely with $3.3 billion

News - As the approval of the spot Bitcoin ETF gained momentum, so did its Open Interest, with Chicago Mercantile Exchange (CME) leading the way. 

According to a recent report from Glassnode, CME surpassed all other exchanges in terms of Bitcoin Open Interest volume, reaching a record-high dominance of 36%.

Examining the trend - An examination of Bitcoin Open Interest revealed a steady increase since around October 2023, reaching its highest point in the last nine months at the time of writing. At press time, the Open Interest was over $20 billion across all exchanges. 

The increase signaled a growing presence of institutional investors in the derivative space. Furthermore, it indicated that buyers had become more proactive in response to recent developments surrounding spot Bitcoin ETFS. 

How has BTC performed? Despite the positives, an analysis of BTC's daily chart revealed a decline from the $46,000 level, with press time trading price at $45,811, reflecting a marginal 1% decrease. This indicated a somewhat bearish trend for BTC, signaling that the anticipated bull run following the approval of the spot ETFs is yet to materialize.

Ethereum Foundation plans smart account overhaul to cut gas consumption

Key points:

  • Transactions must now specify the amount allocated for validation, improving gas estimation accuracy

  • This, in turn, lowers gas costs, particularly on layer-2 networks, by minimizing the published data

News - The Ethereum Foundation had planned significant alterations to the Ethereum account abstraction standard to decrease gas consumption, particularly for layer 2 solutions.

The big change - On 10 January, the Ethereum Foundation provided a preview of significant changes to the ERC-4337 standard, which deals with account abstraction, also known as smart accounts. 

The biggest change is in the makeup of account abstraction transactions. Unlike before, where only one gas value was needed, now users have to specify five gas values, adding complexity to these transactions. 

How is this good for users? Developer John Rising explained that users will experience reduced gas fees as a major benefit of this change. The adjustment employs techniques to enhance the efficiency of transaction data usage, especially beneficial for layer-2 blockchains. 

Additionally, the updated specification introduces a 10% penalty on users for any unused gas during execution, serving as a deterrent against apps initiating transactions with unnecessarily high gas limits.

USDC stablecoin issuer Circle files for IPO in the United States

Key points:

  • Circle is the issuer of one of the largest stablecoins globally—USDC, which is pegged to the U.S. dollar and boasts a market capitalization of over $25 billion

  • Circle has not disclosed the number of shares it plans to sell or the proposed price range for the assets in its IPO

News - Circle Internet Financial, the company behind USD Coin, the second-largest stablecoin, has reportedly submitted a filing for an initial public offering (IPO) in the United States.

What's the plan? On January 11, it was reported that Circle's IPO filing is a step towards the company's goal of becoming a publicly traded firm. However, specific details such as the proposed IPO price range and the number of shares to be sold were not disclosed by the stablecoin issuer.

The company anticipates the IPO to move forward once the U.S. Securities and Exchange Commission concludes its review, noting that this is contingent on market conditions.

A little backstory - Talks about Circle going public first began in 2021 when the stablecoin issuer announced plans to go public through a merger with the blank-check company Concord Acquisition Corp, initially valued at $4.5 billion. The valuation ballooned to $9 billion in 2022 but was eventually called off.

In 2023, the discussion regained attention as a Bloomberg report, citing unnamed sources, revealed that the company was in discussions with advisors, preparing for a possible IPO. At that time, a Circle representative mentioned that being publicly listed in the U.S. had long been a part of the company's strategic goals.

 87% of holders profit as LDO surges 18.9% in a week, outperforming SOL and XRP

Key points:

  • Santiment reported that LDO had 1123 Active Addresses during the 24-hour period on 11 January

  • LDO's upward movement highlighted a strong correlation with ETH, while ARB and OP prices also revealed a similar pattern

News - Lido DAO Token (LDO) has recorded a significant 18.97% price surge in the last seven days, outperforming various altcoins, including SOL and XRP. 

This positive performance has led to approximately 87% of LDO holders being in a profitable position, according to data from IntoTheBlock.

What prompted the uptick? AMBcrypto's analysis indicated that, even though Lido had no major recent developments, the surge in its price could be attributed to Ethereum. At the time of writing, ETH was valued at $2,653, reflecting an 18.48% surge—a performance akin to Lido's. 

The move serves as evidence that tokens linked to the Ethereum blockchain are likely to follow the same trajectory as ETH. In the case of Lido, its backing of Ethereum post-Merge places it within this category.

What's more? In addition to LDO's price movement, a noteworthy change was observed in its Total Value Locked (TVL). According to DeFiLlama's data, Lido's Total TVL surged to $24.77 billion at the time of writing, marking a significant 19.13% increase during the same period when LDO's price climbed to $3.79.  Notably, this TVL figure marks the highest for Lido since its inception.

Crypto scams uncovered

  • Capitalizing on the popularity of the South Korean Netflix series "Squid Game," Squid Coin was launched in 2021. Marketed as a gateway to participate and earn through an upcoming online game inspired by the series, the cryptocurrency's value soon surged to $3000 a piece. Taking advantage of the coin's growing popularity, developers cashed out, causing its value to collapse to $0. This left investors with worthless tokens as the developers disappeared, taking an estimated $3.38 million with them.

  • The Day of Defeat project, promoted as a "radical social experiment," lured investors with promises of a 10,000,000x price increase. Adding to the intrigue, a "Mystery Plan" was touted for an additional 1,000,000 price boost in June 2023. However, contrary to assurances not to redeem funds, developers executed a rug pull in May 2022, withdrawing $1.35 million, leading to a drastic 96% drop in the token's value.

  • In April 2021, Hanad Hassan introduced the Orfano crypto, presenting it as a charity token with a 3% allocation for charitable projects. A few months later, Orfano was abruptly closed, leaving investors unable to withdraw their funds. A month later, Hassan relaunched the scam as OrfanoX, repeating the fraudulent cycle with new investors.

Top 3 coins of the day

Ethereum (ETH)

  • The ETH price has maintained a decent upswing since the last few days of October, elevating over 70% from the initial lows of around $1522

  • Ethereum-related assets ENS and ETC have led the altcoin rally in the past 24 hours

What you should know - After consolidating between the $2150 and $2400 price ranges for over a month, the ETH price broke past the $2600 mark on the 10 of January and reached a high above the $2700 mark on the following day. The crypto was experiencing a minor pullback at the time of writing, as evidenced by its press time price of $2,647, reflecting a 0.5% decline in the past 24 hours. However, the CMF recorded a positive reading, suggesting that buyers were dominating the market. 

Litecoin (LTC)

  • According to IntoTheBlock's data, Litecoin  has observed a surge in transaction count, processing over 6.3 million transactions since 1 January, suggesting renewed interest and increased activity on the network

  • As per Glassnode's data, the daily count of unique addresses actively participating in Litecoin has experienced a 17% rise since 4 January

What you should know - The LTC price showed a swift uptrend as it jumped 15.8% over the past week. At the time of writing, LTC was trading at 75.52, following a hike of 3.7% in the last 24 hours. The Relative Strength Index (RSI) stood close to the 60-mark, visibly flashing a preference for the buyers. The Fear & Greed Index displayed a score of 72 (Greed), suggesting that investors were exhibiting high levels of optimism in the current market conditions.

Cardano (ADA)

  • Over the past month, Cardano's revenue showed strong growth, rising by 92.7%

  • However, during the same period, there was a consistent decline in the number of core developers on the network

What you should know - Despite gaining by 7.2% over the last 7 days, the price of ADA has remained in a bearish zone, struggling to attract buying interest despite a generally bullish trend in the overall market. At press time ADA was changing hands at $0.58, after falling nearly 4.0% over the past day. The RSI, with a reading of 53 over the midline, indicated a minor advantage for the bulls. If the bulls attempt to start a rally, they may face resistance at the $0.65 mark. Moreover, while ADA has strong support at the $0.55 level, an increase in selling pressure might trigger the price to fall further from that level.

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