Vitalik Buterin moved $1M worth of Ethereum coins

The cryptocurrency has had a challenging time so far in 2023 since while it launched into the year with a strong start, it was later hampered along the way by several impediments. The first and most important was the increasing push towards specific regulations within the US market. This situation created uncertain market conditions, causing troubles in the ascension of the Ethereum price. While the drops weren’t as severe as those of the previous year, the environment has been getting increasingly bearish since July.

The changes that intervened around mid-August, when values once again dropped quite considerably, leading to the loss of accumulated gains since the beginning of summer, once again convinced investors that the market is clearly not back to full power yet. Additional concerns came from the fact that the United States’ economic situation is still plagued by inflation and dealing with interest rate hikes. Meanwhile, China is struggling under the yoke of an economic slowdown that is likely to impact countries from all over the world, including Australia, as well as numerous nations in Africa.

As the cryptocurrency market has become increasingly closer to traditional finance, it goes without saying that anything negative that happens in regular markets will likely impact digital finance as well. Here are some of the ways in which things might change over the near future that all investors should be aware of, as well as the market movements that will act as catalysts.

$1M 

As the market continues navigating a difficult period, investors are keeping an eye out for any market movement or trading endeavors that are more substantial and could, therefore, affect prices as well. One of them came on August 21st when blockchain watchers discovered the transfer of no less than $1 million worth of Ether coins. The wallet that performed the transaction belonged to none other than Vitalik Buterin, the co-founder of the Ethereum platform.

Many took this to be an apparent response to the fact that the market continued to remain low and record losses. The wallet address is vitalik.eth transferred a whopping 600 ETH, but the wallet still holds approximately 3,900 coins, or $6.5 million. The large sum was transferred after a previous test transaction two days before of 0,1 ETH.

It’s interesting to note that a different exchange was used this time, but market watchers refrained from making any statements regarding the nature of the transactions. However, several publications and data aggregators began discussing the situation and shared their own insights into the events. There’s no surprise that the transaction caused quite a stir on social media platforms immediately after, and speculation remains rife.

Daily transaction fees 

Ethereum’s daily total fees have dropped to the lowest they’ve been since December 26th. This means that the blockchain is cheaper to use, and since Ethereum is the world’s largest programmable blockchain, it is also good news for the digital finance environment. According to South Korean blockchain analytics, users' daily fees to execute transactions on the platform fell to 1,719 ETH. The tally decreased by almost 90% from the year-to-date high of 16,720 ETH coins back in May. At the time, the blockchain navigated a difficult time, and many investors found it much more challenging to operate on the blockchain.

The Ethereum network made the shift to a proof-of-stake consensus mechanism, which is supposed to be more energy efficient. This system also uses validators instead of miners to create and later verify the blocks. These validators stake at least 32 coins to secure the network. However, a decline in the total fees stands for lower network usage and is a perfect way to estimate the number of pending transactions.

friends.tech 

Since friends.tech launched on August 10th, fees on Ethereum Layer-1 have been approximately 255 lower compared to the year average recorded until then. This contrasts the success of non-fungible token projects such as Yuga Labs and CryptoKitties, at least during their incipient phases. Their launches even created clogs in the network due to the intensity of the hype.

Any success has been attributed to the scalability solutions developed on Layer-2, including Optimism, Base and Arbitrum, which not only help reduce congestion but can also keep track of the transactions as well. However, on August 28th, following a drastic reduction in activity and fees, which recorded sellers, buyers and all other transactions taking a considerable dive, there were some critics that declared that friends.tech could be declared dead.

As there hasn’t been much time since its launch, many were disappointed to see how things turned out. The peak occurred on August 21st but has since declined by over 90%. From 525,000, the figures plummeted to a little over 51,000 on August 27th. Non-crypto users were drawn to the concept of friends.tech as well, which centers on the selling and buying of unique keys that allow buyers to send private messages to the sellers.

Price weakness bias 

The ETH options market is showing bias for price weakness for the following six months. According to market analysts, the prices seem overvalued compared to the revenue. The figures come from the gap between the volatilities for call and put options. The former gives holders the right to buy stocks, while the latter endows the holder with the right to sell stocks. The current values show the scales are tipping in favor of the put options.

The buyer is allowed to sell at a predetermined price, either on or before a specific date. Put buyers are bearish, while call ones are always bullish. The bearish trend has been steadily growing in scope ever since the SEC refused to issue an official ruling on the issue of accepting Bitcoin as part of securities exchanges. While investors were expecting the verdict to arrive on August 13th, the decision was postponed until the beginning of 2024.

To sum up, the cryptocurrency environment is still recovering. While things have been steadily improving, it will still be a while until the market regains its previous vigor and manages to achieve all-time high levels again.