Huge Ethereum buy wall sends ETH to a 19-month high against Bitcoin

The price of Ether hits a 19-month high against Bitcoin as user activity on Ethereum spikes to multi-year highs.

As the price of Ethereum’s Ether (ETH) surpassed $450, a huge buy wall on the major cryptocurrency exchange Bitfinex emerged. Shortly thereafter, ETH achieved $270, a 19-month high against Bitcoin (BTC).

The price of Ether against the price of Bitcoin. Source: Skew

Throughout the past two months, ETH has sustained strong upwards momentum buoyed the rising user activity on Ethereum. 

Data from Etherscan shows that the daily transaction volume on Ethereum rose from around 420,000 in January to over 1.2 million transactions per day in August.

Why ETH price is surging and the demand for Ethereum is consistently growing

The explosive demand for Uniswap and small decentralized finance (DeFi) tokens has created a consistent demand for ETH. On the Ethereum blockchain network, users have to utilize ETH to cover transaction fees, which is also called “gas.”

The gas costs, as a result of surging daily transactions, led users to purchase ETH to pay for network expenses. Since early June, when the DeFi market began to see exponential growth, it fueled the buying demand for ETH.

According to data from on-chain market analysis firm Glassnode, the gas costs are surging so fast it is causing miner revenues to spike. The researchers wrote:

“Ethereum miners earned over $500,000 USD in transaction fees in the past hour. That is a new record high for a single hour (anomalous transaction fees earlier this year excluded).”

The ongoing trend is unlikely to change in the near term as second-layer scaling solutions and ETH 2.0 is far away. 

Hourly transaction fees on Ethereum spikes. Source: Glassnode

Yet, the DeFi market is continuously expanding, leading more users to decentralized platforms, like Uniswap. It remains to be seen whether that would add more buying demand for ETH throughout September.

Spotting the demand, whales or wealthy individual miners are seemingly buying up ETH. Bitfinex chief technical officer Paolo Ardoino said:

“Someone wants really to buy ETH on Bitfinex 7k bid wall.”

Bitfinex is recognized as one of the few exchanges used by many whales, alongside Gemini and Bitstamp. The 7,000 ETH at a price of $458 is equivalent to $3.2 million, which is a large single buy order on an exchange.

A 7.044k ETH buy wall on Bitfinex. Source: Paolo Ardoino

What traders say about the short-term trend

In the near term, traders are generally optimistic about the price of Bitcoin and Ether. Both top cryptocurrencies saw their respective monthly candle close at a multi-year high.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said a minor consolidation is likely. After that, Van de Poppe suggested another attempt at $12,400 is likely for Bitcoin price, with ETH leading the way. He said:

“Bullish. Reached the $12,000 area that I've pointed since the low. Would like to see consolidation above $11,600 here. If that happens, we'll most likely see a rally towards $12,400 and new highs. $ETH already painting the way.”

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Ether Price Hits 2-Year High

The two-year high was reached alongside a drop in the number of coins held in exchange addresses.

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Tezos Investors Win $25M Settlement in Court Case Over $230M ICO

A U.S. lawsuit that alleged the Tezos ICO was an unregistered securities sale has been settled for $25 million.

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Tether surpasses XRP by market cap again

But XRP isn’t competing with Tether.

Tether (UDST), the world’s largest stablecoin by market capitalization, is again outperforming major altcoin XRP.

On Sept. 1, Tether surpassed XRP as the third-largest cryptocurrency by market cap, becoming the second-largest altcoin after Ether (ETH).

As of press time, USDT market cap accounts for more than $13.4 billion, according to data from crypto analytics website Coin360. XRP is now the fourth-largest coin by market cap at $13 billion.

The latest movement in ranking is not new to the crypto market in 2020. Tether outstripped XRP as the third-largest crypto in May 2020.

Both cryptocurrencies have significantly increased their market cap since then. As reported, Tether previously surpassed XRP at a market cap of about $8.8 billion, while XRP’s market cap accounted for $8.6 billion at the time.

XRP’s drop comes shortly after a senior Ripple exec claimed that XRP is not competing with stablecoins. On Aug. 19, Emi Yoshikawa, senior director of global operations at Ripple, argued that XRP does not compete with either stablecoins or central bank digital currencies (CBDC).

According to Yoshikawa, XRP is complementary to the global progress in stablecoin and CBDC development. “We believe that various stablecoins and CBDCs will create synergy by responding to the liquidity problem by bridging independent crypto assets, XRP,” the executive said.

Tether’s new market cap milestones come amid massive growth in stablecoins this year. Both Tether and USD Coin (USDC) have been hitting major milestones recently, with USDC breaking $1 billion in July 2020.

Opposed to highly volatile crypto assets like Bitcoin (BTC), stablecoins like USDT are designed to provide a digital representation of fiat currencies like USD and ensure a “stable” price. Pegged to the USD one-to-one, Tether’s price is always equivalent to one U.S. dollar.

Providing a “stable” cryptocurrency, Tether is the largest cryptocurrency in terms of daily transaction volume. As of press time, Tether’s daily trading volume accounts for over $10 billion, outstripping Bitcoin’s $9.5 billion, according to data from Coin360. As reported, Tether is also bigger than major payment processor PayPal in terms of average daily transfer volume.

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Three of Australia's "big four" banks bring bank guarantees on blockchain

Blockchain tech could purportedly reduce the timeline of bank guarantees processes by days.

Three of the “big four” Australian banks are forming a new company called Lygon to digitize bank guarantees using blockchain technology. 

Bank guarantees are an official contract between a debtor and a financial institution. It ensures the debtor and the debt provider that the debt will be paid on time under all circumstances.

The Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia and Westpac Banking Corporation along with two other shareholders — the Australian shopping center company Scentre Group and technology behemoth IBM — are forming the company after a successful pilot last year.

The last of Australia’s big four banks, National Australia Bank, also tested the technology last year but pulled out of the project in the wake of the ongoing coronavirus pandemic, the Financial review reported on Sept. 1.

Lygon's primary focus is to digitize commercial lease guarantees to save commercial landlords the time and cost involved with operational processes while also ensuring the safety of small businesses in the short term, Lygon chairman Nigel Dobson said.

Bank guarantees today are totally paper-based and may take several weeks to prepare and deliver. The five entities backing Lygon aim to use IBM’s Hyperledger technology to digitize bank guarantees and make issuance a one-day process. The firm is planned to go live in September.

Dobson said, “It comes to market at a time when some people have been questioning the value of blockchain but what makes this work for us, and our customers, is that it solves a really big problem."

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US Regulator to Shake Up Banking With Federal Charters for Payment Firms

Acting Comptroller of Currency (and former Coinbase exec) Brian Brooks is spearheading the move to let payment firms operate as banks across state lines.

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BitMEX Launches Mobile Trading App in 140 Countries

The new app does not include the iconic "trollbox" feature of BitMEX's site, but will in future, the firm said.

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