Investors Put Less Money Into Crypto Funds Last Week as Bitcoin Market Stagnated

Investors Put Less Money Into Crypto Funds Last Week as Bitcoin Market Stagnated

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Tesla Motors (TSLA), Yum! Brands (YUM) - Bitcoin Shoots Past $1T Market Cap Again But Ethereum Steals The Show With NFT Crypto Craze

Bitcoin (CRYPTO: BTC) market capitalization surpassed the $1 trillion level late Monday night at press time but it was Ethereum (CRYPTO: ETH), the runner-up in terms of market cap, that was stealing the show.

What Happened: BTC traded 6.65% higher at $53,844.15 at press time on a 24-hour basis, while ETH was up 7.25% at $1,843.42.

Ethereum has been buoyed by the frenzy surrounding non-fungible tokens in recent days.

In sympathy with the NFT craze, governance tokens of NFT projects too have rallied. Monavale (CRYPTO: MONA) the token of the fashion auction exchange platform was the top gainer at 52.29% at $1,748.13, as of press time.

Other such tokens that have been on the way up are Wax (CRYPTO: WAXP) which shot up 37.71% to $0.192 and Enjin Coin (CRYPTO: ENJ) was higher by 9.49% to $1.82.

See also: Best Cryptocurrency

Enjin soared over 39% on Monday thanks to recent positive news and Ethereum dragging its feet on fee reform.

Chiliz (CRYPTO: CHZ), a native token of the eponymous sports blockchain platform has soared over 200% in the seven days leading up to Monday.

The token traded 76.11% higher at $0.241 at press time.

Why It Matters: There has been an intense buzz around NFTs in recent days as multiple artists like Grimes, partner of Tesla Inc (NASDAQ:TSLA) CEO Elon Musk, Beeple, and Lindsay Lohan releasing artworks using the technology.

On Monday, a now-destroyed artwork by Banksy — “Morons” — sold as an NFT token for over $394,000. Injective Protocol (CRYPTO: INJ) was the firm behind the Banksy buy.

Yum! Brands, Inc (NYSE:YUM) subsidiary Taco Bell too has jumped on the NFT bandwagon by releasing Taco-themed art, which sold out soon after it was made available on the Rarible marketplace.

Apart from the NFT buzz, ETH is also set to benefit from an update this summer that would result in a reduction in the total number of tokens in use.

Read Next: Beyond Bitcoin: China’s Publicly-Listed Beauty App Meitu Buys $22M Ethereum

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Crypto coin outperforming bitcoin is about to see supply reduced

This will be one of the most important years for cryptocurrencies: Mike Novogratz

Ethereum blockchain developers approved one of the biggest changes to the network since its inception in 2015, a shift that could spur even bigger gains in the price of its native cryptocurrency Ether.

The move will reduce the amount of outstanding Ether by destroying some of the tokens every time it’s used to fuel transactions on the world’s most-used blockchain. Known as EIP 1559, the change solves a current problem: Ethereum users can only estimate how much Ether will be needed for transactions to be processed, a guessing game that has spawned sites such as ETH Gas Station to help people know how much to pay. EIP 1559, which will become part of an upgrade in July or August, will embed an average price into the network itself making the guessing game obsolete.

The reduced supply of Ether will likely lead to rising prices as demand for the coins increases, said Eric Turner, director of research at Messari, a cryptocurrency analytics firm.

“This is probably one of the biggest milestones we’ve seen recently,” he said. Until EIP 1559 goes into effect after being approved Friday, the supply of Ether was theoretically infinite, leading to criticism that its underlying monetary policy was weak and inflationary. “Now, they’re actually controlling inflation on Ethereum” and “in some cases you’re looking at negative inflation so it’s definitely important,” Turner said.

Ether has seen an already incredible price gain in the past 12 months, along with Bitcoin and other digital assets. Ether has risen about 560 per cent in the past year, while Bitcoin is up about 430 per cent, according to data compiled by Bloomberg. Unlike Ether, Bitcoin has had since its start in 2009 a fixed supply of 21 million coins that will ever be created. That difference has led critics of Ethereum to say it shouldn’t be viewed as a similar digital currency as Bitcoin.

Tim Beiko, a senior product manager at ConsenSys who’s leading the protocol team implementing EIP 1559, compared the current fee environment in Ethereum to a gas station where each of the four pumps has a different price. Going forward, “we’ll gauge demand for the network and we put that average price as part of the network itself,” he said. EIP 1559 “fixes a bug in the economics of Ethereum we’ve known about from the start.”

The proposal also will change a strange feature in Ethereum that no one really saw coming. Users can now pay an Ethereum miner to process their transaction with a credit card or another cryptocurrency, undermining Ether’s role in its own blockchain, Beiko said. EIP 1559 makes Ether the only way to pay for transactions on the network.

“It cements Ether’s role in the ecosystem,” he said.