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When the Stock Market started crashing a few weeks ago, cryptocurrencies followed the same downward spiral. Suddenly on Wednesday Bitcoin and other digital currencies suddenly began to rebound. That trend continued through Thursday. In fact, Bitcoin was up a whopping 16.1% reaching a high of $6441.
For at least the past 48 hours, cryptocurrencies have been a rare bright spot in a world dealing with the deadly coronavirus pandemic.
The value of the entire cryptocurrency market rose around $23.8 billion in 24 hours at about 8:42 a.m. Friday March 20 Singapore time.
So what's going on here?
Negative interest rates have arrived in the US! 6mo t-bill at -2bps. Means you need to PAY US govt for 6mo cash deposit. Rates to go much more negative to weaken dollar. This is confiscation and it is bad but it needed for now to stabilize system. Mega bullish for #Bitcoin pic.twitter.com/mwgEhnXKsD
— Dan Tapiero (@DTAPCAP) March 19, 2020
Decrypt provides a likely explanation.
In a series of tweets, Nic Carter, founder of crypto data provider CoinMetri, noted that there was a “definite uptick in batching last week or so.”
He saw that Bitcoin transactions are getting bigger on average—while the number of transactions has dropped. This, Carter suggests, is an indicator of more batching.
That batching is coming from the cryptocurrency exchange Coinbase. It launched a new batching initiative, which allows for fewer fees and less congestion on the Bitcoin network—just as the market reached its yearly low.
“This enables the network to increase transaction throughput, and helps to increase scalability,” the company said in a blog.
Liam frost of Decrypt writes:
Bitcoin transaction batching is the process of unifying several Bitcoin transfers into one—more complex—transaction, instead of a single BTC movement taking up a block all to itself. Such “packaging” reduces the load that Coinbase puts on the Bitcoin blockchain by more than 50%.
- Aaron Goldstein, Gambling911.com
