Last Week in Review: Was it the Fed’s last rate hike, and why is everyone talking about Bitcoin fees?
The highlights from last week’s headline grabbers. All the important news, numbers and events from the world of crypto in one place.
News from the block
The Fed increased interest rates
- Jerome Powell and his team at the Federal Reserve announced another interest rate hike of 0.25% on Wednesday last week.
- This brings the tally to nine rate hikes in what’s been the Fed’s most aggressive hiking cycle since the 1980s. Many analysts believe this may be the last one as the US economy and the financial system are showing signs of buckling under the pressure.
- Bitcoin and other risk-on assets generally perform better in low interest rate environments.
🚦 What’s the deal with congestion on Bitcoin?
- The Bitcoin blockchain recorded usage levels last seen in July 2021, pushing the average fee per BTC transaction from as low as 50 cents to more than $7.
- Glassnode data shows that network usage increased by more than 400% on Wednesday last week.
- The surge is due to an increase in BRC-20 tokens, a type of crypto that lives on the network, and the minting of Ordinals on the Bitcoin blockchain. Some Bitcoin supporters say Ordinals are useless and a waste of space, while others argue the network is working exactly as designed by charging these network users exorbitant fees as usage increases. If anything, Bitcoin miners are cashing in.
- The rise in transaction fees has again highlighted the need for layer-2 networks such as Lightning, which was designed to alleviate congestion on Bitcoin.
🟠 Licthenstein is now accepting bitcoin
- Licthenstein is a small country nestled between Austria and Switzerland, in case you were wondering. The country recently announced its plans to start accepting bitcoin for government services.
- Instead of holding the BTC, the country will convert the coins into Swiss francs.
- Prime Minister Daniel Riesch said he’s not planning to add BTC to the treasury just yet, but this may change in future. It’s unclear when the country’s BTC policy will be implemented.
🎭 Alibaba and Avalanche launch platform for companies to create metaverses
- Alibaba, the Chinese multinational tech giant, has launched a platform called Cloudverse, where companies can create and customise metaverse spaces.
- Avalanche will provide the technology to build these Web 3 spaces.
- AVAX, the native crypto of the Avalanche network, lifted a modest 1% following the announcement.
Why diversify your investments?
Preserving wealth against volatility is less exciting than watching your investments go up, but a balance between the two approaches is very important for any investment strategy.
Read HERE why diversification is considered a cornerstone of long-term investing.
Crunching the numbers
🐸 558% – By how much the price of Pepecoin, a memecoin, increased in the last couple of weeks.
👋 0.22 – The correlation between bitcoin and the SP500, with 1 being in perfect lockstep. The last month has seen an increase in divergence between the stock index and the leading cryptocurrency.
👝 89% – The share of all bitcoin in circulation owned by investors not considered to be institutional investors or whales. These retail investors individually own less than 0.1% of BTC supply.
💎 16% – The share of ETH in circulation currently staked on Ethereum.
🥵 400,091 – Last week saw a new record number of Ordinals minted on Bitcoin in one day.
👀 37,421 – The amount of Ordinals minted one month ago on the day.
The crypto time capsule
Avalanche made news recently by partnering with tech giant Alibaba to bring the metaverse to customers on Alibaba’s cloud platform, but what makes Avalanche a top-20 crypto? Read HERE.