- Bitcoin trades at USD 7,400, after surviving a drop to almost test USD 7,000 support levels
- Bittrex moves almost USD 9 billion in Bitcoin in under an hour for a new network record
- The crypto lending industry is estimated to be worth USD 4.7 billion
After yesterday’s surprise launch into the monthly high, Bitcoin price once more descended down the channel, possibly due to some intense profit taking, to record a low of USD 7,089 (CoinDesk). However, the recovery has been ongoing as well and the price range has veered clear of the USD 7,000 support level, trading now at USD 7,400 at 8:15 pm London time.
$8.9 billion in #Bitcoin were moved on–chain in a single hour this afternoon.
It's the highest hourly USD transaction volume in Bitcoin's history 🔥 pic.twitter.com/pWdXBszuIc
— Rafael Schultze-Kraft (@n3ocortex) December 4, 2019
Price may be temporary, but fundamentals is permanent, as Bitcoin network continues to display. Today, the world’s oldest blockchain-based digital currency made a new record for itself, recording the highest hourly US dollar transaction volume in its history.
To be precise, some USD 8.9 billion worth of Bitcoin had changed hands in a 60-minute timeframe. This did not include change coins, that is, coins that returned to a sender’s wallet after deducting the transaction amount and miner’s fee.
Blockchain market intelligence firm Glassnode’s co-founder Rafael Schultze-Kraft claims that it is a first for the network, proving that on-chain use case was as real as ever. Upon digging deeper into the data, Glassnode claims to have found the entity behind this movement: crypto exchange Bittrex, who has moved Bitcoin in huge volumes many times.
This record was thanks to 21 transactions within an hour, each happening on chain and moving some 56,000 BTC (almost USD 416 million) each. More surprisingly, each individual transaction only cost Bittrex a fee of 60 cents. It does seem to correlate with maintenance times that were scheduled today by the global exchange. Bittrex has told Cointelegraph Spain that no hacks had occurred, meaning to say, all of these were intended transactions.
Speculation is rife that these are funds moving from cold wallets — wallets that are kept disconnected for extra security and less exposure to online hackings — although it is anyone’s guess why this would happen.
Meanwhile, fresh studies show that lending platforms servicing crypto are getting more and more popular, with their proliferation down to an increased demand from people willing to loan out their crypto in return for interest rates typically higher than that of regular banks.
Cointelegraph’s Elena Perez writes that the idea of putting crypto into automated smart contracts as loan collateral is catching on well. Interest accrued by these contracts are done automatically, preventing any entity from meddling in the process. It even processes all credit payments by a set of rules hard coded into the contract. Everything is done automatically — from credit checks and scoring. Lenders are also safe from needing to consider more overt means to push borrowers thanks to these smart contracts.
Because overheads are low — with all the costs saved from those extra processed that a traditional bank might be forced to do — savings are passed on to the services themselves. As a result, borrowers can take loans at lower interest rates, and can borrow more easily than they would at banks, who typically ask for a lot of collateral or very high credit scores, putting most retail borrowers out of reach.
Blockchain firm Graychain Ltd puts the crypto lending industry at a total value of USD 4.7 billion, with loan platforms rapidly growing. Lenders are the winners, earning a combined interest of USD 86 million since 2018, but the demand is not dissipating, with more than 18,500 new loans issued in the second quarter of 2019 alone, over three times the number in the first quarter (5,400). Volume also increased, more than doubling from USD 64.8 million in the first quarter to over USD 159.3 million in the second.
Not all onlookers are optimistic, however. Many are warning that the industry is too new: the risks are too high for very low returns, with little in terms of a safety nets. The expansion is also too fast, mirroring traditional issues in financial markets. Factor in the low lending standards and excessive supply outstripping demand, and a perfect storm could be waiting to happen.
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