This Week In Crypto | 2 - 8 February

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Dacxi

Feb 8, 2022

5 MIN

Ethereum Worth $1 Billion Burned in January as NFT Sales Surge on OpenSea

Business Intelligence Firm MicroStrategy Buys 660 More Bitcoins

Bitcoin Network Surpasses American Express in Transaction Volume, Says Research

Alphabet is Exploring Blockchain Technology

Global VC Funding For Blockchain Firms Surpasses $25 Billion in 2021

 

This week, Ethereum burning touched record high as NFT sales continue to surge on OpenSea. Amid a dip in Bitcoin prices, MicroStrategy added 660 Bitcoins to its stash. Bitcoin Network surpassed American Express in terms of number of transactions. Also, Alphabet Inc, the parent company of Google, is exploring blockchain technology. On the other hand, a report found that blockchain firms raised over $25 billion from venture capital companies in 2021. 

 

Ethereum Worth $1 Billion Burned in January as NFT Sales Surge on OpenSea

According to data from Nansen Analytics, more than $1.09 billion worth of Ethereum was burned in January due to high transaction volume that was recorded on the world’s largest NFT marketplace, OpenSea.

This record burn rate that took place in the last month is the highest since the introduction of the EIP-1559 upgrade in August 2021, in which a part of fees is taken out of circulation for every transaction that takes place on the Ethereum blockchain.

Though the gas fees for sending and receiving Ether are less, the cost of minting non-fungible tokens (NFTs) via smart contracts is more expensive.

In January, the total volume of NFT transactions on OpenSea hit an all-time high of $3.5 billion. The NFT marketplace is currently ranked #1 on a burn leaderboard compiled by UltraSound Money. And with the surge in the minting of NFTs, it is certain that the amount of token burns on the Ethereum chain has also increased.

 

Business Intelligence Firm MicroStrategy Buys 660 More Bitcoins

Microstrategy, which is one of the largest advocates of buying and holding bitcoins, has taken advantage of the dipping bitcoin price by adding more bitcoins to its holding.

The U.S.-based business intelligence company is said to have added 660 bitcoins to its holdings between December 30, 2021, and January 31, 2022, for approximately $25 million in cash.

In a Tweet, the company CEO Michael Saylor confirmed the purchase saying, “MicroStrategy has purchased an additional 660 bitcoins for ~$25.0 million in cash at an average price of ~$37,865 per #bitcoin. As of 1/31/22 we #hodl ~125,051 bitcoins acquired for ~$3.78 billion at an average price of ~$30,200 per bitcoin. $MSTR.”

MicroStrategy CEO Saylor is a prominent supporter of Bitcoin. Last year, he said that his company’s strategy was to invest in bitcoins for the long term and reap rewards from them. The company bought bitcoins worth $250 million in August 2020, and since then, it has invested nearly $4 billion to buy bitcoins in different purchases.

 

Bitcoin Network Surpasses American Express in Transaction Volume, Says Research

According to research published by NYDIG analysts, the annual transaction volume on the bitcoin network has surpassed that of some prominent card networks such as American Express.

The report titled “NYDIG Research Weekly” stated that Bitcoin processed $3 trillion worth of payments during 2021, placing it above popular credit card networks American Express ($1.3 trillion) and Discover ($0.5 trillion). However, leading payment giants like Visa and Mastercard still continue to dominate the payments industry. 

The report authored by global head of research Greg Cipolaro and research analyst Ethan Kochav noted saying, “This is astonishing growth, in our opinion, for a payment network that just had its 13th birthday.”

However, the report shows that the analysts have only considered the U.S. dollar value of transactions instead of the actual number of transactions. Hence, it is likely that most of the bitcoin transactions were only related to users purchasing, swapping, and selling their bitcoins instead of using them for payments.

 

Alphabet is Exploring Blockchain Technology

Alphabet, the parent company of Google and its subsidiaries, is actively exploring Web3 and blockchain technology. According to a statement by the CEO of Alphabet, Sundar Pichai, the company is exploring integrating blockchain technologies into its flagship products and services.

In comments delivered during Alphabet’s Q4 earnings call, Pichai said, “On Web3, we are definitely looking at blockchain, and such an interesting and powerful technology with broad applications so much broader again than any one application. So as a company, we are looking at how we might contribute to the ecosystem and add value.”

The CEO also noted the work done by Google Cloud, which is already exploring ways on how it can support the needs of customers in building, transacting, storing value, and also deploying new products on blockchain-based platforms.

CEO Pichai’s comments follow a sequence of reports indicating the company’s growing interest in blockchain and related technologies.

 

Global VC Funding For Blockchain Firms Surpasses $25 Billion in 2021

According to the “State Of Blockchain 2021” report published by CB Insights, the global venture capital funding for blockchain startups reached $25.2 billion in 2021, a 713% increase from $3.1 billion in 2020.

In the fourth quarter of 2021, the U.S. led the greatest amount of funding deals by generating $6.26 billion from 157 deals. The report highlighted that the global growth was driven by increasing consumer and institutional demand for crypto-related products and services. 

Funding for blockchain startups accounted for 4% of global venture dollars, an increase of 1% from 2020. CB Insights says that this percentage will grow further in 2022, given the growth in crypto, non-fungible tokens (NFT), and Web 3 startups.

Overall, more than 1,000 blockchain deals were completed in 2021, surpassing 2020’s level of 662. Of those 2021 deals, 79% were early-stage investments, said the report.