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The Bitcoin rally above $50,000 reversed following the release of the US Consumer Price Index (CPI) report for January, which exceeded expectations, causing weakness across the financial markets. Data from TradingView shows that Bitcoin's response to this news was immediate, with the cryptocurrency losing support at $50,000 and falling to a low near $48,400 before bouncing back above $48,600 with buying interest. Adam Berker, Senior Legal Counsel at Mercuryo, stated that several factors collectively influenced the recent surge in Bitcoin prices above $50,000 and the overall sustained momentum. Following the approval of a Bitcoin ETF, there was a need for new fuel to maintain positive trends, and news of a possible approval of an Ethereum ETF provided just that. However, the upcoming Bitcoin halving in April also played a role, significantly affecting market sentiment and price surges. A researcher at crypto asset management giant Grayscale noted that recent developments suggest that Bitcoin (BTC) may be more than just "digital gold".
In a new analysis, Grayscale's Michael Zhao highlighted the surge in on-chain activity for Bitcoin.
"The emergence of ordered inscriptions has revitalized on-chain activity, with over 59 million non-fungible token (NFT) collectibles being inscribed as of February 2024, bringing miners over $200 million in transaction fees. This trend is expected to continue, fueled by developer interest and ongoing innovation in the Bitcoin blockchain."
Bitcoin inscriptions allow users to record digital data such as images and videos onto a single satoshi, the smallest unit of BTC, creating something akin to an NFT on the network of the top cryptocurrency. Zhao noted that inscriptions have sparked a "cultural shift" in the Bitcoin community, attracting new developers to join the ecosystem.
In addition to inscriptions, Grayscale analysts emphasized that Bitcoin's use cases are evolving with the emergence of smart contract protocols running on the Bitcoin network.
"Some solutions have quietly laid the groundwork for this evolution for years in existing layer-two solutions. Stacks stands out as a platform that introduces full-featured smart contracts to Bitcoin. It facilitates the development of various decentralized applications (DApps) leveraging Bitcoin's security, ranging from DeFi to NFTs. These DApps represent the forefront of Bitcoin's transition to a multifaceted ecosystem capable of supporting a wide range of blockchain-based applications." |
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Post time 20-2-2024 23:11:14
