Altcoins soar to multi-year highs while Bitcoin price gathers steam

Etheruem’s rally to a new all-time high is being followed by equally impressive performances from the majority of altcoins.

Ether (ETH) led the market higher as it trekked toward another new all-time high at $1,763. ETH CME futures are scheduled to launch on Feb. 9, leading many analysts to predict that the top-ranked altcoin will hit $2,000 before meeting any significant resistance. 

Data from Cointelegraph Markets and TradingView shows Ether currently trades at $1,714, an increase of 3.27% on the 24-hour chart while Bitcoin (BTC) is up 0.21% and trading at $37,633.

ETH/USDT 4-hour chart. Source: TradingView

Gas fees on the Ethereum network also set a new all-time high this week with the average transaction cost reaching $17.5 on Feb. 3, which prompted some exchanges to halt ETH and ERC-20 withdrawals.

Ethereum average gas price. Source: Etherscan

On Feb.4 Yearn Finance (YFI) underwent an exploit which saw a hacker drain $11 million worth of DAI stablecoin from the version 1 DAI yield vault. The team has responded quickly by taking several steps to help mitigate the damage of the attack.

These included Tether freezing $1.7 million in stolen funds which will be returned to the project and a proposal from the MakerDAO community to create a purpose-built collateralized debt position (CDP) to make affected users whole.

Positive news came from Protego, a Washington-based institutional crypto custodian, who announced that it has become the second crypto-native firm to receive national licensing from the U.S. Office of the Comptroller of the Currency.

Democrats vote to push the stimulus bill forward

Stocks rose on Friday as U.S. lawmakers passed a key hurdle in the rollout of the next stimulus package which could see individuals making less than $50,000 per year get a $1,400 stimulus check.

A majority of the major indices finished the day in the green, with the S&P 500, Dow and NASDAQ closing the day up 0.39%, 0.30% and 0.57% respectively. Silver also saw a gain of 2.82% and closed the day at $26.98.

Altcoins push higher

As Bitcoin trades in a range between $36,000 and $38,000, altcoins are gaining momentum and multiple coins saw their prices breakout on Friday.

Daily cryptocurrency market performance. Source: Coin360

MakerDAO (MKR) gained another 45% to establish a new all-time high of $3,099 before correcting to $2,810, while the DeFi infrastructure protocol 0x (ZRX) has seen its price rise 61% to $1.63.

Notable performers from the larger cap altcoins were Cardano (ADA), which is up 26.44%, and Binance Coin (BNB) which reached a new all-time high at $64.87

BTC/USD daily chart. Source: Coin360

The overall cryptocurrency market cap now stands at $1.17 trillion and Bitcoin’s dominance rate is 60.1%.

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‘Expensive lesson’: 75 Eth2 validators slashed for introducing potential chain split bug

A company providing nodes for Eth2 stakers was penalized for breaking safety protocols in the pursuit of higher performance.

Staking infrastructure provider Staked said it had learned “an expensive lesson” after 75 of its Eth2 validators were slashed on Feb. 4 from the staking pool as punishment for producing competing blocks. 

In a statement, Staked took the blame for the “technical issue” and said its customers would be “fully compensated”. The company will pay the penalty of 18 ETH, which is around $29,000 at current prices.

An unanticipated reaction to configuration changes caused several nodes managed by Staked to restart in error, leading them to incorrectly sign a second version of a previously-signed block. This introduced the potential for a split in the Ethereum blockchain.

According to Eth2 statistics maintained at Beaconcha.in, the snafu at Staked resulted in the largest single validator slashing event to occur since the Beacon Chain project went live on Dec. 1 2020. Validator slashings have otherwise been a rare occurrence so far.

Staked admitted it had made mistakes while pursuing “technical performance over double-signing robustness,” describing the outcome as “not a good trade-off.”

“We attempted to scale up the number of beacon nodes to get better performance […] The performance gains we achieved weren’t worth the additional risk we inadvertently added.”

Staked added that no customer funds were harmed by the bug and they will reimburse affected customers with ETH held in the slashed validators, as well as their accumulated rewards.

The validators were slashed between blocks 456892 and 457585, with the official reason for slashing listed as “Attestation Violation.”

Anticipation for Eth2 is increasing as overbearing gas fees are preventing ordinary users from being able to transact on the Ethereum blockchain. However, the bug momentarily introduced by Staked serves as a reminder that significant testing is still required before Eth2 can advance to the next phase of release.

Despite the recent slashing, the number of validators on Beacon Chain — the initial phase of the Eth2 rollout — is currently at an all-time high of 91,701. This reflects a gain of 25,000 validators over the last two week.

With 32 ETH per validator, the overall value of Ether stored in the Eth2 Deposit Contract is now $4.7 billion.

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Ultra-rare alien CryptoPunk NFT sells for 605 ETH, or $750,000

The NFT market is getting molten hot as a rare “alien” CryptoPunk sells for over $750,000

Amid a wild market-wide bullrun for non-fungible tokens (NFTs), an ultra-rare “alien” CryptoPunk has sold today for 605 Ether, worth over $750,000 at today’s prices. 

CryptoPunks are widely considered to be the original NFT project, released even before Cryptokitties, the blockchain-based collectibles project that propelled NFTs to mainstream consciousness. CryptoPunks developers Larva Labs report that Punks have accounted for $26 million in lifetime sales on their native marketplace, and the average sale price for Punks over the past year has been $6,199.

Each Punk has unique attributes, such as background color, accessories, and even some ultra-rare features, such as an “alien” or “zombie” appearance. The Punk that sold today, #2890, is one of nine alien Punks in existence.

The bidding for the Punk was competitive throughout the last week, with DeFi megawallet-turn-Twitter personality 0x_b1 putting in a 500 ETH bid. The Punk was last sold in July of 2017 for 8 ETH, meaning the owner made a 75x return on their investment. 

The new owners are a group of investors that include FlamingoDAO, a “NFT collective that supports and collects premium NFTS,” according to a Flamingo spokesperson. The official FlamingoDAO Twitter handle confirmed the purchase with a meme:

“It’s simple: Cryptopunks is a groundbreaking project; it pre-dated the ERC 721 standard and crypto kitties,” said the spokesperson on the investment thesis. “Aliens are the rarest form of Cryptopunk and we believe that the acquired Alien will be prized by collectors over time and mature into an iconic digital art piece.”

Crypto art collector @gmoneyNFT, who himself dropped 140 ETH on a Punk earlier in the month, thinks that the alien is a fine investment despite the sky-high valuation.

“I think it was a great purchase. As the world moves more digital, the digital “flex” will be more and more important. It’s how humans operate in the physical world. It won’t change in the digital realm,” he said.

Long-derided as a secondary usecase for blockchain, sales like today’s demonstrate that NFTs are just beginning to have their day in the sun. NBA Topshot, a collectible highlight project from Dapper Labs, has proven to be tremendously popular, and Axie Infinity’s native critters have been selling for remarkable prices as of late as well.

Some critics have called into the question the sky-high prices rare NFTs have been fetching, however, arguing that simple digital scarcity is a shaky foundation on which to justify a $750,000 sale. @gmoneyNFT dismisses these criticisms, saying that there are plenty of real-world analogues that make just as much — or as little — sense.

“Why would someone pay millions of dollars for an original Andy Warhol screen print when you can buy the same one online for $20? Why would someone buy a pair of yeezy’s for $300 when you can buy a fake from the same factory, made with the same materials for much less? Humans like to feel special. The provenance has value.”

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Exchanges running out of ETH with reserves plunging 27% in 48 hours

Analysts predict Ether may soon hit a new all-time high after ETH reserves on centralized exchanges fell by 27% in two days.

The amount of Ether held on exchanges has plunged over the past two days, with CryptoQuant data indicating that just 8.1 million ETH is currently sitting in the reserves of centralized exchanges.

The acceleration of ETH being taken off exchanges was highlighted by Nuggets News’ Alex Saunders, who noted a 10% drop in Ether reserves on centralized platforms on Jan.14 — from 11 million to 10 million over 24 hours. “Exchanges will run out of ETH in 10 days at current rate,” he predicted.

Earlier today, Saunders noted the decline in Ether reserves had escalated by a further 20% leading him to suggest that centralized platforms may run out of ETH in the next 48 hours.

Other data providers also show that exchange balances have fallen by 42.5% since tagging an all-time high of 14.1 million in mid-May 2020. 

Data from Glassnode indicates that Ether reserves on centralized exchanges have not been this low since July 2018. As of this writing, only 7% of Ether’s circulating supply is held on exchanges.

Saunders interprets the data as suggesting an explosive bull-run into new all-time highs is imminent for Ether, stating:

“We all know what happened when demand outstripped supply of $BTC. It quadrupled in 90 days.”

CryptoQuant data shows that exchanges’ BTC reserves have fallen by 21% since posting an all-time high of nearly three million during March 2020. However, the recent acceleration in Ether being taken off exchanges far outpaces that of BTC. Exchanges’ BTC reserves only fell by 4.5% since Oct. 21 while Bitcoin’s price increased 230%, from roughly $12,000 to $40,000.

According to crypto market data aggregator Into The Block, Ether is currently exhibiting numerous bullish signals, including a bid-to-ask volume imbalance of almost 9%.

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ETH en route to overtake its 2018 ATH as Bitcoin breaks $37K

ETH broke above $1,200 for the first time in almost three years, extending its weekly gains to 62%.

Bullish fervor surrounding Ethereum (ETH) intensified on Wednesday, as the second-largest cryptocurrency broke above $1,200 for the first time in three years. The gains were largely driven by a confluence of fundamental factors, including Bitcoin’s parabolic rally, the anticipation of ETH futures contracts and a surging DeFi sector. 

ETH price exceeds $1,200

Ether’s value peaked at $1,223.84 on Bitstamp, its highest since Jan. 2018 just before the market topped. At press time, ETH was up 8% and trading just above $1,210. The cryptocurrency is up more than 60% over the past week, bringing its total market cap to $135 billion.

ETH/USD exchange rate via TradingView

At the current pace, Ethereum looks poised to smash its previous record high of $1,432.88, possibly in the next few days.

Bitcoin juices up entire market

As 2021 ramps up, Bitcoin’s gravitational pull on the broader crypto market has intensified. The flagship cryptocurrency has just peaked north of $37,150 and is continuing to climb.

Over the past month, Bitcoin has rallied almost 90% on the back of growing institutional interest and a supply squeeze limiting the available supply. Ether and other digital assets have benefited from Bitcoin’s leadership pace. In fact, there’s some evidence to suggest that institutional investors are eyeing ETH as the Bitcoin trade becomes crowded with players with deeper pockets.

CME set to launch ETH futures

CME Group has also identified growing institutional interest in Ethereum and has announced plans to launch a new ETH futures product next month.

Beginning Feb. 8, traders will have the opportunity to bet on Ethereum via regulated exchanges. The new futures product, referred to as the CME CF Ether Reference Rate, will provide traders with more efficient exposure to the digital asset, enabling wider price discovery and, possibly, higher adoption within institutional circles.

DeFi boom is not over

While the DeFi craze appears to have settled down following last summer’s historic highs, the ecosystem is growing in lockstep with the broader market. As of Wednesday, virtually every major DeFi coin in the top 20 had reported double-digit weekly gains — some even exceeding the explosive price growth of Ethereum.

Since many DeFi projects are built on Ethereum, the sub-class has a positive impact on the ETH price. According to CoinMetrics, the DeFi boom could fuel Ethereum’s growth over the long term. 

Industry data also reveal a substantial increase in total value locked, or TVL, in DeFi projects. At last check, nearly $21.7 billion had been locked into the ecosystem, the highest on record.

Total value locked in DeFi by DeFiPulse
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