Ethereum with massive addresses growth – Crypto weekly update

This week, the total market capitalization exceeded 1.74 trillion EUR. Decrease at the 7-day interval is 1.13 %. Bitcoin decreased by 2.98 % during the week to a current value of over than 38,300 EUR. Bitcoin dominance is 42 %.

Ethereum with massive addresses growth

The latest analytical on-chain data released by IntoTheBlock revealed that 18.36 million new addresses with a balance higher than zero were added to the Ethereum blockchain over the past year. That works out to an astonishing growth rate of 1.53 million new addresses per month, but competition is becoming increasingly fierce for market share.

There are a total of 70.4 million addresses on the Ethereum blockchain with the balance higher than zero, according to on-chain data.

Despite Ether (ETH) reaching two new all-time highs in price in 2021, the growth rate of new addresses was not particularly correlated with price spikes.

While overall numbers are up, there has been a decrease in the proportion of active addresses on the network. Overall, active addresses were 1.05% of all addresses on Jan. 1 2021, but fell to 0.86% as of Feb. 15.

The number of whales holding more than 1,000 ETH has also been declining since the start of 2021. On-chain analytics firm Glassnode reported that whale wallets had reached a 4-year low of 6,226.

Ethereum is still the leading smart contract platform by total value locked (TVL) in the ecosystem. The total locked value on the Ethereum blockchain is currently $127.59 billion, according to Defi Llama. The second-largest platform in TVL, Terra, has currently locked $15.13 billion. Source

JPMorgan enters Metaverse

JPMorgan, the largest U.S. bank, has opened a virtual lounge in the popular blockchain-based world Decentraland, taking a significant step forward in adopting Metaverse.

Visitors to the lounge, situated in Decentraland’s Metajuku Mall, are greeted by a roaming tiger and a digital portrait of Jamie Dimon, CEO of JPMorgan. If players walk upstairs, they can watch an executive’s presentation on the economics of cryptocurrency.

The Lounge called „Onyx by J.P. Morgan“, named after JPMorgan’s in-house blockchain payments system, was unveiled alongside a report from the bank detailing the types of business opportunities companies can expect to find in the metaverse.

The report notes the average price of virtual land doubled from $6,000 to $12,000 between June and December last year and predicts that in-game advertising spending will have reached $18.4 billion per annum by 2027.

In addition to JPMorgan, the growing interest in Metaverse is driven by a number of globally well-known companies, including Adidas, Nike and especially Samsung, which has opened its own metaverse store in Decentraland. Source

Ethereum fees are falling

Ethereum’s average transaction fees dropped by almost 73.3% just within a month.

One of the biggest enemies of Ethereum users has always been the disproportionately high transaction fees. However, since January 10, the infamous transaction fees underwent a decremental phase. Just in one month, the average transaction fee on Ethereum dropped to $14.17 — the lowest since September 2021.

Data from Blockchair shows that the average transaction fee of ETH in January was $53.03, which means that just within a month, the average fees saw an almost 73.3% decline.

The transaction count of the Ethereum network has also come down to numbers that were last seen back in early 2019. Blockchair data show that on Feb. 1, Ethereum’s transaction count went down to 14,574,808 from 36,851,128 — a 60.44% drop in just one month. Source

Russia wants to legalize cryptocurrency mining

Russia’s Ministry of Economic Development recently introduced a proposal to explicitly legalize and tax Bitcoin mining in regions with an electricity surplus.

As reported by local news agency Izvestia on Tuesday, the proposal is designed such that the country can benefit from mining while not overwhelming its electrical grid in vulnerable areas—a problem faced by other countries, including Iran and Kazakhstan. This will be accomplished by confining mining to reliable grids and setting electricity-use limits on individual miners.

As an incentive to expand the mining industry, the Ministry plans to introduce lower electricity rates and tariffs for setting up Bitcoin mining farms in certain areas.

Russia’s central bank, however, isn’t so keen on the idea. It has pushed to have Bitcoin and other cryptocurrencies outright banned, citing risks to the financial system and volatility concerns. That said, recent negotiations between the Bank of Russia and the national government have left regulation a more likely outcome. Source

BlockFi with a high fine

BlockFi is reportedly poised to pay a $100 million fine to settle allegations from the Securities and Exchange Commission (SEC) and other state regulators that it illegally offered a product that pays customers high interest rates to lend out their digital tokens.

During the investigation, the SEC and state investigators have been probing whether the accounts offered by BlockFi are akin to securities that should be registered with regulators. High-yield accounts that far exceed the returns available through traditional savings accounts have attracted thousands of clients. As part of its agreement with regulators, BlockFi will no longer be able to open new interest-yielding accounts for most Americans.

“We can confirm that clients’ assets are safeguarded on the BlockFi platform and BlockFi Interest Account clients will continue to earn crypto interest as they always have.” BlockFi spokeswoman Madelyn McHugh said.

SEC Chair Gary Gensler has been sounding the alarm on fast-growing crypto firms, arguing that some are offering financial services without adhering to benchmark investor-protection rules that banks, brokers and other long-established entities have long had to comply with. The SEC is also currently investigating Celsius, Gemini and Voyager Digital for similar problems. Source

Curiosity: Inflation continues to rise

The Consumer Price Index (CPI), the most-watched measure of inflation in the U.S, hit a 40-year high of 7.5 %. The increase was the fastest since February 1982 and exceeded economists’ predictions of 7.3%.

The news about inflation came just a week after a government employment report signaled a strong jobs market and fast wage growth.

Bitcoin, which has the properties of digital gold due to its limited supply, is considered by many experts and economists to be a great hedge against inflation. However, bitcoin’s price reacted slightly defensively to the news about inflation, with a 1.9 percent drop, largely due to concerns that the Federal Reserve would be even more aggressive in raising interest rates than previously forecasted.

The Fed kept interest rates near zero after the latest Federal Open Market Committee (FOMC) meeting in January, but hinted at rate hikes starting in March. Source

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