Author: CoinDesk Analysis Team

Dogecoin’s daily transaction reached lifetime highs after ‘DRC-20’ tokens introduced

https://www.fxstreet.com/cryptocurrencies/news/dogecoins-daily-transaction-reached-lifetime-highs-after-drc-20-tokens-introduced-202305170707

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Dogecoin’s daily transaction volume rose tenfold from the average daily earlier this week to set a lifetime peak following the launch of a new mechanism that now allows the issuance of tokens on the Dogecoin blockchain.

The network saw over 645,000 transactions on Sunday, data from BitInfoCharts shows, briefly crossing both Bitcoin and Litecoin transactions that day before falling back to previous levels as of Wednesday.

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Dogecoin transactions bumped over Bitcoin briefly earlier this week. (BitInfoCharts)

Historical data shows Dogecoin typically sees around 20,000 daily transactions However, the introduction of the DRC-20 token standard on May 9 has led to an immediate increase in network activity.

These standards allow developers to issue tokens that take network fees in the form of dogecoin (DOGE). This adds to the value proposition for dogecoin and lays the path for potential decentralized finance (DeFi) services built on the blockchain.

DRC-20 Attracts Criticism

Despite the bump in transactions, not everyone is amused with the DRC-20 token deployment. Critics point out that DRC-20 may lead to network congestion and that it moves away from dogecoin’s aim of being used as an everyday currency.

“The DRC-20 Dogecoin community should stop this shameless hype,” wrote one Dogecoin community member on Twitter. “Everyone should probably focus on the transactional currency use case,” said another.

High fees and network congestion are valid concerns for any blockchain as they may lead to the network becoming expensive, and slow, for everyday users – damping adoption plans.

Bitcoin’s own ‘Bitcoin Request for Comment’ (BRC-20) standard went live in March last month, opening the floodgates to two-year high fees as a Bitcoin-based meme coin trading frenzy gained notoriety on the network.

Bitcoin, Ether volatility stuns bears and bulls alike, some say recent price action driven by bank crisis

https://www.fxstreet.com/cryptocurrencies/news/bitcoin-ether-volatility-stuns-bears-and-bulls-alike-some-say-recent-price-action-driven-by-bank-crisis-202303150941

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Higher-than-usual market volatility affected bulls and bears alike as crypto futures racked up $300 million in liquidations in the past 24 hours.

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.

Bitcoin and ether briefly inched above $26,000 and $1,770 respectively on Tuesday as investors brushed off the long-term effects of a regulatory clampdown on crypto-friendly banks and U.S. Customer Price Index (CPI) data pointed to slowing inflation in the coming months.

But the euphoria was short-lived as both major tokens dipped as much as 5% from Tuesday’s highs before gradually stabilizing. In Asian morning hours on Wednesday, bitcoin traded just under $25,000 while ether traded slightly over $1,700.

The volatility caused over $140 million in bitcoin futures and $80 million in ether futures to take on losses. Of this, 58% of futures losses came from shorts, or bets against price rises, while the remaining came from longs, or bets on price rises – meaning both short-sellers and long traders were hit almost equally.

Among other major tokens, futures on Conflux’s CFX tokens and Filecoin’s FIL saw $8 million and $5 million in liquidations, respectively, as trading volumes for both surged on fundamental developments.

Over $300 million in crypto futures were liquidated in the past 24 hours. (Coinglass)

Meanwhile, some market observers said the price action came as investors looked for alternative assets following last week’s collapse of Silicon Valley Bank.

“Bitcoin’s rally to a new yearly high as Silicon Valley Bank falls and inflation remains stubborn shows that investors are looking to bitcoin for stability in highly uncertain market conditions,” Alex Adelman, co-founder of bitcoin rewards app Lolli, told CoinDesk.

“While many have looked to bitcoin as a hedge against inflation and tracked its price moves accordingly, bitcoin’s relationship to traditional finance is more complex,” Adelman stated, adding that bitcoin worked as an “alternative to the traditional financial system at large.”

“Weakness across the banking sector has heightened investor awareness of bitcoin’s unique value proposition. In the coming weeks, we will continue to see increased demand for bitcoin as a superior system for holding and moving money securely,” Adelman opined.