Ethereum
Bitcoin and Ether Prices Fall After Dencun Upgrade
Key takeaways
- Bitcoin hit another high early last week, but ended it sharply lower.
- Fees on various Ethereum Layer 2 networks fell dramatically last week after the Dencun upgrade, but ether prices also declined.
- Government prosecutors in the trial against Sam Bankman-Fried have recommended up to 50 years in prison for the former FTX CEO.
- Digital asset manager Grayscale has filed to create a second Bitcoin exchange-traded fund (ETF), to use the BTC ticker.
- This week, analysts are tracking inflows into Bitcoin ETFs, and March’s numbers have already eclipsed those of January and February.
What happened in the crypto markets last week?
The past week has proven to be a roller coaster ride for Bitcoin (BTC), the largest cryptocurrency by market cap surpassed another all-time high of $73,000 to start the week, but fell below $65,000 on Sunday after a massive sell-off. Ethereum Dencun upgrade achieved its goal by reducing fees on various layer 2 networks, but ether (ETH) prices also weakened at the end of the week.
Elsewhere, prosecutors recommended that former FTX CEO Sam Bankman-Fried be sentenced to up to 50 years in prison on charges related to fraud and money laundering. Additionally, digital asset manager Grayscale Investments filed a runner-up application for a Bitcoin ETF in a bid to reduce its management fees.
Dencun Upgrade Leads to Lower Fees on Ethereum Layer 2 Networks
Following the Dencun upgrade on Ethereum mainnet on March 13, Ethereum Layer 2 (L2) Protocols have seen a remarkable reduction in transaction fees, with some protocols reducing fees by up to 99%. Dencun, hailed as a crucial scalability-focused upgrade, is considered one of Ethereum’s most significant advancements since Fusion.
Major L2 protocols marked an impressive 99% decrease in gas fees after the upgrade, with current fees for some like Starknet dropping to 2.7 cents. The introduction of data blobs via EIP-484 during Dencun hard fork has improved the processing of transaction data, providing faster and more profitable transactions for L2s.
Prosecutors recommend up to 50 years in prison for former FTX CEO Bankman-Fried
Federal prosecutors are seeking a stiff sentence of up to 50 years for the disgraced cryptocurrency prodigy. Sam Bankman-Friedaccording to court documents revealed Friday. Bankman-Fried, former CEO and co-founder of bankrupt cryptocurrency exchange FTX, was convicted of several criminal charges, including wire fraud and money laundering.
The prosecution says his actions warrant a sentence commensurate with the scale of his crimes, highlighting the need for justice in the face of widespread harm and blatant disregard for the law. As the March 28 sentencing date approaches, the severity of the recommended sentence stands in stark contrast to the relatively lenient request made by Bankman-Fried’s legal team.
Grayscale Files for New Bitcoin ETF with BTC Ticker
Digital asset manager Grayscale Investments made headlines last Tuesday in deposit for a spin-off of its Grayscale Bitcoin Trust (GBTC), an initiative aimed at providing investors with more profitable exposure to bitcoin.
The spin-off, designed to reduce fees associated with GBTC, responds to investors’ preference for lower-cost alternatives, especially since GBTC’s fees have been comparatively higher than those of its competitors. Grayscale plans to introduce the Grayscale Bitcoin Mini Trust, which will hold a portion of the bitcoin currently held by GBTC, with existing GBTC shareholders receiving shares of the Mini Trust in exchange.
Despite Bitcoin’s surge to record highs, GBTC has seen significant outflows of more than $11 billion since January, compared to inflows from competing ETFs such as BlackRock’s iShares Bitcoin ETF (I BITE) and the Fidelity Wise Origin Bitcoin Fund (FBTC). Although Grayscale has not yet finalized fees for the Mini Trust, the split signals a strategic move towards independent operation for GBTC and the Mini Trust following regulatory approval earlier this year, marking a significant development in the evolving trust landscape. Bitcoin investment opportunities. .
What to expect in the markets this week
Bitcoin spot ETF volumes in March are already much larger than they were in January and February. Additionally, BlackRock has accumulated over 230,000 bitcoins through its IBIT offering. That said, capital flows appear to be slowing after peaking at over $1 billion on March 12, according to data from Farside Investors. This week, analysts will be watching to see if inflows into these ETFs continue to decline.