News
Bitcoin halving stabilizes price, surge in network transaction fees
Key points
- Bitcoin experienced its fourth halving on Friday, with the amount of bitcoin created roughly every 10 minutes falling to 3,125.
- After the halving, the price of bitcoin stabilized; However, fees on the network have increased in connection with the launch of a new protocol for issuing tokens.
- Fees associated with Grayscale’s second spot bitcoin ETF product have been made public and will make the Bitcoin Mini Trust the cheapest offering on the market.
- A New York jury has found a man guilty of fraud and market manipulation in a $110 million scheme on the Mango Markets DeFi platform.
- This week, analysts continue to monitor the consequences of the bitcoin halving, including the long-term effects of a decrease in block subsidies on overall network security.
The fourth bitcoin (Bitcoin) halving event occurred Friday evening with no immediate effect on its price, although the cryptocurrency was trading higher above $66,000 on Monday. A sudden spike in Bitcoin network transaction fees was observed during the halving and this was attributed to the launch of Runes, a new meta protocol for issuing tokens on top of Bitcoin. blockchain.
Outside of the halving, the low fees associated with Grayscale’s new spot bitcoin exchange-traded fund (ETF) offering, the Bitcoin Mini Trust, has been disclosed. Additionally, the cryptocurrency world suffered its first conviction in a market manipulation case.
Bitcoin network transaction fees increase after halving
THE bitcoin halving The event was highly anticipated and closely followed by both investors and miners.
Halvings are significant because they reduce by half the rate at which new bitcoins are generated and rewarded to bitcoin miners roughly every 10 minutes. This most recent halving reduced the block reward to 3,125 bitcoins per block.
While there were no immediate price swings for bitcoin, there was a sudden increase in transaction fees on the network. The halving block was mined from the ViaBTC mining pool. In particular, the miner earned more than 40 bitcoins in subsidies and fees per block from this single block, significantly more than the average reward prior to the halving. This is due to a massive increase in transaction fees, likely due to increased demand for inclusion in this historic block and new development.
The Runes protocol, launched around the time of the halving, led to higher fees on the Bitcoin network because it introduced a system where participants could mint digital tokens directly on the Bitcoin blockchain. This new feature has sparked intense competition among users to register unique asset names first, forcing them to pay increasingly higher transaction fees to prioritize their transactions in the Bitcoin network.
The day after the halving, the average fee for Bitcoin transactions rose to an all-time high, according to Kaiko Research, more than seven times the previous day’s fee and double the previous record.
Grayscale BTC will be the cheapest Bitcoin spot ETF
Digital Asset Manager Grayscale previously archived for an alternative to its current high-cost spot bitcoin ETF, known as Grayscale Bitcoin Confidence (GBTC). According to a recent statement, the new offering will carry a management fee of just 0.15%, positioning it as the cheapest option on the market. The existing GBTC, known for its 1.5% fee, will transfer 10% of its assets to the new BTC Mini Trust as part of this strategic move. This transition will also include an automatic issuance and distribution of BTC trust shares to existing GBTC shareholders.
This initiative is designed to align Grayscale’s offerings more competitively with other recently approved bitcoin ETFs with lower fees. According to Blockworks data, the cheapest bitcoin spot ETF available is the Franklin Bitcoin ETF (EZBC), which has a commission of 0.19%. Furthermore, for current GBTC shareholders, this spin-off will not generate any taxable events, meaning they will not face capital gains tax to transfer their holdings to the new fund.
As of today, GBTC holds approximately $19.6 billion in assets, making it the largest spot Bitcoin ETF on the market. GBTC’s closest competitor is BlackRock’s iShares Bitcoin Trust (IBIT), which has total assets of just over $17.5 billion.
The first conviction for manipulation of the cryptocurrency market
On Thursday, Avraham Eisenberg was found guilty by a jury of all three charges of fraud and market manipulation in a $110 million scheme on the Mango Markets platform. The charges stem from when Eisenberg engaged in trades that artificially inflated the value of Mango Markets’ native token, MNGO, and its associated futures contracts. He then exploited these overvalued people futures as collateral to withdraw large amounts of other cryptocurrencies from the platform.
According to US Attorney Damian Williams, this was the first conviction for market manipulation in the cryptocurrency industry. “If you engage in fraudulent activity, whether in cryptocurrency or through other forms of market manipulation, you will be held accountable for your ill-gotten gains,” said Timothy, the FBI’s deputy executive director of Criminal, Cyber, Response and Services. Langan.
Eisenberg now faces up to 20 years in prison, setting a significant precedent for US law enforcement in decentralized finance (DeFi) ecosystem.
What to expect from the markets this week
hThis week, cryptocurrency market watchers are still tracking the lingering effects of the bitcoin halving. While price is obviously a key area of focus, the potential for meta layers, such as Runes and Sort them, to help provide long-term security to the Bitcoin network through increased demand for block space will also be a key phenomenon to watch. Furthermore, it is possible that higher fees at the entry level could drive greater adoption of various tools Layer 2 networks like the Lightning network and side chains.
While a report from CoinShares indicates that some miners may switch to artificial intelligence (AI) as halving leads to less revenue, there are a number of factors that could more than compensate for lost earnings caused by the halving. Stocks of bitcoin miners like Riot Platforms (REVOLT), Hut8 (HUT) and Digital Marathon (MARA) traded substantially higher on Monday.
It remains to be seen whether the fourth halving will lead to another massive bull run, as was the case with previous halvings; relationships of Deutsche Bank and JPMorgan said the event may already be priced in by the market.