Crypto Highlights Week #33 – ETH Transaction Fees Hit All-Time High Second Day in a Row

Crypto Highlights: Profitability for Ethereum Miners Hits 2-Year High, Defi Implosion: YAM Token Market Cap Plummets to Near Zero, ETH Transaction Fees Hit All-Time High, Bitcoin battles the $12k resistance area: these and more in this week’s crypto highlights.

Top Headlines Of The Week

• The 11th of August ushered in some corrective movements in gold and silver. Similar measures were seen in the crypto-market with Bitcoin (BTC) dropping by a whopping $700 from $11,800 to $11,100 in one day.
• Yield farmers excited about its recent decentralized finance project, it got a rude awakening after the YAM token’s value declined to a miserable near zero.
• A blockchain data platform ‘Blockchair’ revealed that the average transaction fees paid by Ethereum users have reached an all-time high above $7.50.

Daily Profitability for Ethereum Miners Hits Over 2-Year High

BitInfoCharts shows the daily profitability for Ethereum miner operators is at $5.8 per 100 megahashes second (MH/s) of computing power – a level not seen since early May 2018.

This increasing profitability is expected to see the recent price rise of the Ether (ETH) cryptocurrency and a surge in transaction fees brought on by increasing levels of decentralized finance (DeFi) activities on Ethereum. Ethereum mining equipment now runs with a profit margin above 90% even at an electricity cost of $0.05 per kilowatt-hour. 

Coindesk highlighted that July saw the profitability metric soar by over 60%. Also in July, ETH was traded at around $320 and daily mining profitability was about $3.27 per 100 MH/s. In the last two weeks, ETH prices have been closer to $400 per token.

Coinbase to Offer Bitcoin-Backed Loans to US Customers

Coinbase announced on Wednesday that it will allow U.S. retail customers to borrow fiat loans against as much as 30% of their bitcoin holdings in the fall. The exchange is setting conservative parameters on the product by capping credit lines at $20,000 per customer and offering an interest rate of 8% for bitcoin-backed loans with terms that are a year or less. 

Within 2 or 3 days customers get to access their loans after filing a brief application but will not have to go through a credit check. The product is available in only 17 states to wit: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin, and Wyoming. 

Currently, Coinbase is also pursuing licenses in other states and countries to be able to expand its lending service. Therefore it is captured in the top crypto highlights for this week.

Traditional payment systems are failing: Is cryptocurrency the future?

The 21st century is characterized by many strategic revolutions e.g. a digital payments system. The improvements in the payments system brought with it the use of ATM cards, POS machines, and online payment models. 

Notwithstanding, this paradigm shift is not exempt from a myriad of limitations, including corporate fraud, scams, and endless regulations. Just recently, on June 25, Wirecard, an electronic payment service, went down the drains when its CEO was called out for a “sophisticated and elaborate fraud” of almost 3.5billion euros. 

This and many more are evidence to show that the traditional financial system is plagued by corporate fraud that renders the system somewhat fruitless. It also appears that the advent of cryptocurrencies which is backed by a distributed ledger technology offers some, if not all, the answers to the problems of the current payments system e.g. a secure peer-to-peer network, immutability, and decentralization.

More Top Stories of the Week

ETH Transaction Fees Hit All-Time High Second Day in a Row

Blockchair, a blockchain data platform revealed that the average transaction fees paid by Ethereum users have reached an all-time high above $7.50. Vitalik Buterin, the ETH co-founder called for a reform of Ethereum from June – July suggesting that fees being this high could compromise the security of the network. 

He explained that miners’ increasing reliance on transaction fees may trigger selfish mining practices and consequently disrupt how transactions are processed. He offered a solution to the effect that the blockchain should burn base transaction fees to reduce the miner’s reliance on them as a source of income. 

Max Bronstein, a Coinbase researcher added that the high transaction fees were as a result of increased interaction with stablecoins on the Ethereum network.

How Taxation Cuts In The US Could Help Profits In Cryptocurrency

Recently, the President of the United States, Donald Trump proposed an exciting tax cut for the crypto industry. Trump said that the administration for his presidency was seriously considering a capital gains tax cut which he said will create more jobs. 

However, like most of Trump’s conferences, there is a debate on the extent of his ability to deliver these kinds of cuts. He would need to get lawmakers and regulators on his side through negotiation.

Many Americans are currently required to report their gains and losses on each transaction, especially when it comes to cryptocurrency. For the crypto space, this would mean much fewer benefits to traders as profits in crypto can make CPI look insignificant. This Executive Order promises an exciting turn of events for Crypto traders.

This Week’s Market Sentiment

Is the Bitcoin Bull Market in Jeopardy After Failure to Break $12,000?

The 11th of August ushered in some corrective movements in gold and silver. Similar measures were seen in the crypto-market with Bitcoin (BTC) dropping by a whopping $700 from $11,800 to $11,100 in one day. Nevertheless, with the strong surges from Chainlink (LINK) and Tezos (XTZ), it seems that the bull market is still scaling. 

It also appears that once the price of Bitcoin loses the support level at $11,100-$11,300, expectations are that the price will continue to slide down towards the $10,000 area. The next massive support zones are found at $9,700-$10,000, which is similar to the CME gap. 

Open gaps are quite frequently tested and closed before the market continues to rally upwards. In this case, the price accelerated in the weekend, through which a CME gap is left open from $9,650 – $9,900. The $12k strong resistance area is the biggest stronghold, the bulls will be looking for a potential break above this region to increase momentum towards the $14k mark. 

Biggest Fallout Of The Week

Defi Implosion: YAM Token Market Cap Plummets to Near Zero After Founder Claims He ‘Failed’

Yield farmers excited about its recent decentralized finance project, it got a rude awakening after the YAM token’s value declined to a miserable near zero. The developers of the DeFi project discovered a major flaw in the rebasing contract and at 4 a.m. ET, cofounder Brock Elmore tweeted that he was sorry he “failed.” 

Nevertheless, many well known ETH supporters told Elmore that the project was a good attempt. As of Wednesday, over $500 million was already cashed into the project. 

Immediately after this bug was revealed to the general public, the YAM token’s value dropped significantly as the token touched a whopping $167.66 per token. At the time of publication, the token is only worth $0.97 per YAM.

Meme Of The Week

We hope you enjoyed this week’s edition of crypto highlights . For a peek at our last edition of crypto highlights & blockchain news, click here.