Bitcoin, Ether fall to month lows; Polygon leads losers; U.S. equity futures up as inflation cools

Bitcoin, Ether fall to month lows; Polygon leads losers; U.S. equity futures up as inflation cools

Time Stamp: May 12, 2023 1:19 AM
Source Node: 2645328
Bitcoin prices slid on Friday morning in Asia to below US$27,000 amid concerns about shrinking liquidity and congestion on the network that are driving up transaction costs. Ether fell below support at US$1,800 as all top 10 non-stablecoin cryptocurrencies retreated. Polygon’s Matic led the losers. U.S. equity futures edged up as economic data on Thursday indicated inflation is slowing, raising optimism the Federal Reserve may halt its interest rate hikes in June.

See related article: Bitcoin network buckles under weight of BRC-20’s runaway success

Bitcoin, Ether fall to monthly lows

Image: Envato Elements

Bitcoin slid 2.13% to US$26,974 in the 24 hours to 08:30 a.m. in Hong Kong, according to CoinMarketCap data , losing 6.63% for the week. The world’s largest cryptocurrency fell to US$26,781 at one stage on Thursday, the lowest price since March 28.

Congestion on the Bitcoin blockchain is fueling the slide, with a backlog of waiting transactions reaching almost 300,000 on Friday morning, over six times higher than the number on May 9. That was when the BRC-20 token standard was introduced to allow the minting of fungible tokens on the Bitcoin network and generated a surge in activity, according to data from blockchain researcher Jochen Hoenicke .

The jump in transaction volumes has raised concerns among Bitcoin developers. Luke Dashjr, a Bitcoin code contributor, emailed the Bitcoin developer community on Monday to suggest blocking the transactions of BRC-20 tokens, which “threaten the smooth and normal use of the Bitcoin network as a peer-to-peer digital currency.”

Bitcoin’s drop also comes amid rising concerns about liquidity. Jane Street Group and Jump Crypto, two of the world’s leading market makers, are reportedly quitting digital asset trading in the U.S., according to a Bloomberg report on Wednesday.

Ether fell 2.34% to US$1,795, posting a weekly loss of 4.45%. The token dropped to US$1,774 on early Friday, the lowest price since April 3.

The Beacon Chain of the Ethereum Network briefly stopped validating transactions on early Friday morning, with Ethereum developers tweeting later that the outage had been resolved and the cause still under investigation.

All other top 10 non-stablecoin cryptocurrencies traded lower. Polygon’s Matic token led the losers, dropping 3.75% to US$0.8406 and retreating 14.45% for the week. The token logged a low of US$0.8332 earlier today, the lowest price since January 8, 2023.

The total crypto market capitalization fell 2.11% in the past 24 hours to US$1.12 trillion. The total trading volume dropped 17.87% to US$37.67 billion.

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