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Bitcoin continues its path around $27,500 despite network issues rising to a crescendo over the weekend as transaction fees surged. 

The cryptoasset began the week just below $28,000 and reached a high midweek of just below $29,500 before tumbling back to trade below $27,500. Bitcoin has been on or around this level now since mid-March.

Ether saw similar volatility last week, having begun around $1,800 before soaring to nearly $2,000. It has since seen a pullback to essentially where it began. Like bitcoin, ether has held firm around the $1,800 mark since March. 
 

Ordinals scramble the Bitcoin market

Bitcoin miners are being paid more to process transactions than to mine new tokens for the first time since 2017 after the introduction of BRC-20 ‘Ordinals’ NFT tokens to the Bitcoin blockchain. 

Transaction fees surged over the weekend and created network congestion as subscriptions to Ordinals soared. The issue seems to have had some short-term impact on price particularly as some exchanges have struggled under the activity pressure. 

Transaction fee income surpassing mining income is an important shift too. Mining will become less and less profitable as halvings push forward. With bitcoin supply permanently capped mining will ultimately become much less lucrative than processing transactions - be they for NFTs or otherwise. 
 

Ethereum Foundation move threatens market selling

The Ethereum Foundation moved 15,000 ether tokens onto a Kraken deposit address over the weekend, sparking market volatility. 

This is something the foundation does periodically. It holds around 0.3% of all the ether and funds its activities by periodically selling some of its holdings. This essentially created a small panic wave of investors looking to make transactions before the tokens were liquidated on the market, sending prices lower, similar to what happened previously in 2021. 

The movement of the tokens is something of a storm in a teacup in market terms though. The quantity amounts to around $27,508,650 - a large sum to be sure in nominal terms - but only accounts for around 0.01% of the $221 billion-worth ether in circulation. In essence, a correction driven by the foundation’s activity is largely self-fulfilling.
 

MakerDAO launches lending protocol

Major DeFi project MakerDAO has today launched a lending and borrowing network named Spark Protocol. The protocol allows users to lend and borrow major cryptoassets such as Ethereum, staked Ethereum (stETH), Dai and sDai. 

Borrowing and lending are core functions of the financial services and banking sectors. Ultimately if crypto wants to challenge the dominance of TradFi it has to crack this aspect of the global financial system. 

Lending allows users with assets to earn a yield, while borrowing is necessary for households and businesses to be able to afford to build their lives or invest in their businesses. Decentralized lending then is potentially a game-changer for the market and greatly increases the scope of cryptoasset uses. 

There is still suspicion among investors as to the yield generation of some tokens, but MakerDAO’s protocol would appear to offer more realistic terms than some others currently.

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