Ether transaction costs have long since overtaken Bitcoin, while the correlation of the largest crypto currency to the stock market could unleash undreamt-of price potential and a whale sends its Bitcoin assets on a journey. The market update.
Shortly before reaching the 11,000 mark, the Bitcoin price (BTC) made another U-turn. With a minus of 1.2 percent, the crypto reserve currency slipped to 10,736 US dollars at the time of going to press, but posted a plus of 2.8 percent in a weekly comparison.
Ether overtakes Bitcoin in transaction fees
The constant growth of decentralised finance (DeFi) is causing the Ethereum network more and more trouble. This is clearly visible in the increasing ether transaction fees, which have been rising for months and which, according to bitinfocharts, reached a peak value of 14.5 US dollars on 2 September.
At currently just under USD 3, average fees are significantly below the levels reached at the beginning of September, but still above the fees in the Bitcoin network of currently USD 2.25.
For example, total transaction costs in the Ethereum network so far this year amount to $354 million, while the Bitcoin network comes to $157 million. The Ether fees are thus already more than double the Bitcoin fees.
Bitcoin and its correlation
The latest Bitcoin increase after last Mondays drop in prices went hand in hand with the stock indices, which also recovered after brief distortions. Bitcoin has thus once again demonstrated the trend of a strong correlation especially to the market-wide S&P 500.
According to data aggregator Skew, the current correlation with the S&P 500 for the month of September is 53.5 percent. If the correlation is above 0, the markets correlate positively; if it is below 0, the correlation is negative.
As Glassnode notes in the current Week-on-Chain, the correlation indicates a growing demand for Bitcoin from institutional investors.
This correlation can be explained by the increasing popularity of BTCs among traditional investors, including large institutions. Bitcoins trend to become a mainstream asset partly explains why Bitcoin has failed to sustainably break above $11,000 despite strong on-chain fundamental data.
So the scapegoat for the course stagnation has been found. Bitcoin is thus a plaything for the big players, who are increasingly accumulating their BTC stocks and thus taking over more market share.
However, the situation is not quite so pessimistic. Glassnode also notes that the increasing influence is playing into the hands of Bitcoin in the long run.
However, as demand from the traditional financial world continues to grow, BTCs limited supply should work in its favour and gradually drive the price up.
Giant whale sets itself in motion
As can be seen from the transaction ticker Whale Alert, a previously unknown sender transferred 12,565 BTC on 29 September to an equally unknown address. The equivalent value amounts to over 134 million US dollars.
ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ ðŸš¨ 12.565 #BTC (USD 134,796,920) transferred from unknown wallet to unknown wallet
Tx: https://t.co/pTyd3jC1eb – Whale Alert (@whale_alert) September 29, 2020
According to the Bitcoin Block Bot, the sender could have been the crypto exchange Coinbase.
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