Good morning. Here is what happens:
Prices: Bitcoin and Ether prices are falling due to even BRC-20 coin congestion, with a potential solution being a profit shift to altcoins and Ethereum.
Knowledge: Bitcoin’s path “isn’t straight,” Paul Eisma, head of trading for XBTO Group, told CoinDesk TV.
Bitcoin Buckles Under Pressure From Network Congestion Chaos
Bitcoin starts the trading day in East Asia down 2.6% at $27,715, while Ether is down 1.4% at $1,850.
“What’s happening right now in bitcoin is, is quite unprecedented. And we haven’t really seen this in many, many years,” said 21Co co-founder and CEO Hany Rashwan, during a recent appearance on CoinDesk TV.
Like others, Rashwan blamed BRC-20 meme coins, but also said we shouldn’t confuse them with altcoins.
“I wouldn’t rank meme coins in the same league as altcoins like Ethereum or Solana,” he said. “These altcoins are essentially smart contract platforms that facilitate a range of functions, including but not limited to meme coins and NFTs.”
Rashwan sees a way out of the congestion that involves meme coin holders taking profits and switching to altcoins and Ethereum, which could in turn lead to an increase in the value of these coins.
But it will take another big macroeconomic event to kickstart this move. And for now, we’re stuck with PEPE’s Bitcoin NFTs.
Bitcoin’s Not So Straight Path
Meme pool congestion on Binance and bitcoin’s steep decline are “growing pains,” but the largest cryptocurrency by market capitalization “will do well in the long run,” chief trading officer Paul Eisma says. for the XBTO Group, at CoinDesk’s “All About Bitcoin Program” on Monday.
“It’s almost like a deer in the bitcoin protocol headlights,” Eisma said, linking the latest technical issues to the late 2021 Taproot upgrade that boosted bitcoin network privacy, among other improvements.
But Eisma said optimistically that bitcoin has remained in a range of around $25,000 to $30,000 for much of this year. He said crypto is still in its formative years, so naturally subject to the same headwinds that have plagued other early-stage technologies throughout history.
“Like any young and growing technology that gets upgrades and changes, this is part of it,” Eisma said. “It’s part of the growth and evolution of the network, and the path is not straight.
Eisma said he would watch Wednesday’s release of the May consumer price index (CPI) to get an idea of the U.S. central bank’s next privacy decision. The Federal Reserve has raised interest rates by 25 basis points (bps) three times in a row, but monetary policy watchers, especially those critical of the Fed, are hoping for an end to the bank’s hawkish policy.
“What asset markets are looking for is something that’s not too strong or too weak because if something comes up and around, like, I don’t know, more or less, you know, a gap -decent and weak type of what is expected, so (it’s) still too early for a break in rate cuts,” he said. But he added cautiously that the current inflation rate is still above “the 2% level that the Fed is looking for. This is still the base PCE level that they’re looking for as well. So, you know, Powell has been clear that he’s going to hold rates at this level for longer than the market implies.
Binance resumed bitcoin (BTC) withdrawals again after a second pause as the Bitcoin network suffered from unprecedented congestion. This happened as holders of Pepecoin (PEPE) could take profits on their positions following one of the most dramatic rises in the history of alternative currencies (altcoins). 21.co co-founder and CEO Hany Rashwan shared his analysis of the crypto markets. Glauber Mota, CEO of Revolut Brazil, and Kavita Gupta, founder of the Delta Blockchain Fund and GP, also joined the conversation.