- All time records are set for Bitcoin futures gap as network sees biggest block size ever
- Bitcoin is surging in popularity in Iran as state approves redenomination of fiat
Bitcoin is now just hours and not days away from the next block reward halving event, and all eyes are on the markets as well as the network block count, with transactions piling up in anticipation of a violent price move.
At the moment, price is still below the USD 9,000 range and far from the USD 10,000 range that Friday saw, so even if we experience a 20% price spike, we could still fail to break Friday highs. But we all know how volatility affects Bitcoin!
Bitcoin does have a knack for breaking records and we start our Monday with news of two records taken off the history books. The first is the Bitcoin futures gap which will see a USD 1,200 gap open up today, making it the biggest in history so far. In futures, a gap occurs when the Monday trading session is substantially different from then they closed on Friday the previous week. As we recall, Friday was approaching USD 10,000 when CME Group futures trading ended, and today right now just hours away from opening, it is closer to USD 8,600.
Looking back, albeit only a relatively brief history, traders can see prices either fall or rise to fill this gap, and if a pattern is to be followed, we should see a rebound in price as Monday’s price tries to meet where Friday left off.
That would certainly be in tandem with the other record being broken: Bitcoin block size. Thanks to growing adoption of the Segregated Witness (SegWit) upgrade first introduced in 2014 and more actively adopted in 2017, Bitcoin transaction data has been significantly reduced, allowing more efficient use of space in the Bitcoin blocks to store transaction data, and effectively expanding the size of Bitcoin blocks from its old limit of 1 MB.
According to data from blockchain.com, the average block size of the Bitcoin network has hit a new high, peaking at 1.341 MB on 2 May. And this is all happening as more miners are pouring into the network, with hash rate also approaching a new figure. This is exciting news for speculators and indeed for miners as fees are now also increasing, with the average transaction fee for Bitcoin going at USD 3.20 last week, up more than 300% since the 62 cents average on 26 April just two weeks ago.
Historians will note that Bitcoin price booms have largely been followed by a peak in network fees as transactions pick up, leading to longer queues in the transaction pool, and people then paying higher fees to have their transactions prioritized. Miners benefit, and the global hash rate reached more than 142 exahashes per second (EH/s) and if everything is on track, we will see a new ATH just before halving occurs in the next 12 hours or so.
In Iran, Bitcoin is also enjoying a spurt of growth as the state bankers there are losing interest in a hyperinflating Iranian rial (IRR) and thinking instead to redenominate, leaving citizens to eyeball a strong Bitcoin.
News that Iran’s Parliament has sanctioned the redenomination of its rial to replace it with what will be called a toman that will be equal to IRR 10,000, it essentially tries to deflate the national fiat by four zeros so that the local economy can be revived. Zimbabwe and Venezuela have done so in the recent past, with varying levels of success, so most people will be forgiven for their lack of confidence in the moves.
Iran’s case is slightly different of course, a victim of long-term economic sanctions, the country is still cut off from the international banking and monetary system, and constantly grapples with severe liquidity issues and foreign exchange shortage.
Bitcoin is a popular alternative both to store value and to circumvent these international sanctions, as it escapes any form of censorship, allowing users to send money abroad or to sell it for local currency on local peer-to-peer platforms like Localbitcoins, where Bitcoin is sold for a 300% premium currently.
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