Ethereum made waves again this week as the platform was pushed to its limits with capacity during another popular ICO. The Status ICO, which raised nearly 90 million dollars in just one day, clogged the Ethereum network as pushy investors sent their ETH transactions with huge gas limits to ensure they would be first in line for the token offering. This basically clogged up the entire Ethereum network for at least two days. To make matters worse, some exchanges were forced to disable ETH wallets from their trading platforms because of the strain it was putting on their systems. Looks like we are seeing scaling problems pop up with more than just bitcoin. The crypto-space is growing faster than the developers can innovate to keep up.
The Bitcoin mempool has dropped 90% in 1 month! For those that are not familiar with what the bitcoin mempool is, it’s basically all the transactions waiting to get confirmed by nodes and included in the blockchain. For a quick video description check here. How could this affect you? When you send a bitcoin transaction on the network your BTC transaction is competing with all the other transactions to get confirmed by the nodes. If there are a lot of transactions waiting in the mempool, one could assume this will play into higher fees for everyone. The higher the fee you pay, the better chance your BTC transaction will get bumped to the front of the line because miners can use discretion as to which transactions they mine first. Your fee is calculated by how big your data is vs the amount of BTC you send with your transaction to be confirmed. It’s a ratio. To find the best ratio in real time check here. Most of us have been automatically selecting the highest fee setting on our software wallets as of late to get confirmed within the day. You might see some temporary savings on your bitcoin transactions right now as you may be able to get by selecting a normal or even economic fee and still get your transaction confirmed in a reasonable amount of time.
What goes up must come down. Another cryptocurrency correction has swung through this week with the total market cap of all cryptocurrencies shedding around 13 billion dollars. During this rout Ethereum experienced a flash crash on the GDAX exchnage with prices falling from the $300 range all the way down to 10 cents! According to GDAX this was caused by a multi million dollar sell order that was just tossed on the books without being worked in slowly to avoid such a quick loss in price. GDAX has commited to reimbursing clients that lost massive amounts of money with stop loss orders triggered in this crash. Many traders and investors are very flighty right now because of the up and coming Aug 1st deadline for UASF to go into effect. This coupled with the fact that BTC has amassed such enormous gains in such a short time have contributed to such a sharp decline this week. Many feel that a much bigger correction is coming and this may be true. But as of now the longer term bull trend seems to be holding. I made a video showing this trend line this week. You can find it here. Skip to 13:56 for my explanation on this. So far my theory seems to be holding with a bounce right where my trend line was placed. Of course these lines that I draw are arbitrary and by no means the rule. We could go bear at any time, but as of this writing I would still consider us in a long term bull market with BTC.