The number of billion-dollar spot volume days in the bitcoin market is increasing, pushing prices higher. Ethereum’s transaction fees are also increasing as general cryptocurrency interest fuels demand.
Bitcoin closed in on the $19,500 price point Wednesday, hitting as high as $19,474, according to CoinDesk 20 data, before losing momentum, down to $18,883 as of press time.
“Following a meteoric rise over the past week, bitcoin appears to have consolidated at $19,000 even after briefly dropping below this important psychological milestone,” noted Guy Hirsch, U.S. managing director for multi-asset brokerage eToro. “This is important because it shows there is support for bitcoin at this valuation for the first time in its history.”
“Bitcoin maintains itself above $19,000 so we’re about a 2% move away from approaching the all-time highs last seen in 2017,” noted Elie Le Rest, partner at quant trading firm ExoAlpha. “Every day we’re seeing volumes increase across venues.”
Helping to lead bitcoin’s price run is volume. In fact, Tuesday’s $1.8 billion in combined daily volume on five major USD/BTC spot exchanges (Bitstamp, Coinbase, Gemini, ItBit and Kraken) is the second largest recorded in 2020, only superseded by March 13’s $1.9 billion level. As of press time, Wednesday’s volume for the five exchanges was approaching $1 billion.
“The last few weeks we’ve seen volumes rise aggressively and we don’t expect that to come off too much over the next few days,” noted Michael Rabkin, head of institutional sales for crypto market maker DV Chain. “From a price perspective, we believe there is a lot of momentum in this risk-on market and cannot see it coming to a halt anytime soon given all the money being printed globally.”
Indeed, the amount of M2 U.S. money stock jumped from $15 trillion in January to $19 trillion in November, a 26% increase of circulating money supply created this year in an effort to stave off coronavirus-inflicted economic problems.
And while many market observers talk about bitcoin’s proximity to an all-time price high, many are ignoring the impact has also had on the market. plus an increase in decentralized finance, or DeFi, use cases seem to be fueling the ether fire. In 2020, bitcoin is up over 162% while ether has gained a whopping 343%.
“The recent Eth 2.0 contract milestone is driving a lot of positive sentiment around ether,” noted John Willock, chief executive officer of crypto custody provider Tritium.
Ether (ETH), the second-largest cryptocurrency by market capitalization, was down in Wednesday trading around $581 and slipping 4.1% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
Transaction fees on the Ethereum network are rising. On Tuesday, average fees hit 0.00577876 ETH, the highest since Oct. 8.
The website Cryptofees.info, which collects data from Coin Metrics, puts Ethereum in the top spot for fees in the cryptocurrency ecosystem. Over the past week, Ethereum has generated almost $3 million in average fees alone, and the network’s decentralized exchanges (DEXs) Uniswap, SushiSwap and Curve are also in the top five in terms of average one-week fees.
Brian Mosoff, chief executive officer of investment firm Ether Capital, says this fee data is a sign of the Ethereum network’s user demand. “A quick look at cryptofees.info shows that Ethereum is by far the most used network, even more so than Bitcoin,” noted Mosoff. “Ethereum fees are rising as a result of the appreciation in the price of ETH and demand for usage of the network.”
Digital assets on the are mixed Wednesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):