Crypto Scoop: Bitcoin Hits An All-Time High, And Ethereum Dencun Upgrade Goes Live

This week, the crypto space celebrated milestones as top cryptocurrencies hit record-breaking highs. In this edition of the Crypto Scoop, we review the following: 

• Bitcoin’s ATH and price gains in the crypto space
• Ethereum’s successful Dencun upgrade
• Crypto initiatives and adoption across the globe.

Bitcoin Hits A New ATH Amid Price Gains in the Crypto Space

In a week marked by significant milestones, the crypto space witnessed a series of events that underscored the growing mainstream acceptance and investment in digital currencies. The leading cryptocurrency, Bitcoin, achieved a new all-time high (ATH) of $73,750, while Ethereum (ETH) also saw substantial gains, trading at $4,000. This influx is primarily attributed to the massive inflows into Bitcoin Exchange-Traded Funds (ETFs), which hit $1 billion in daily inflow, highlighting the increasing institutional interest in cryptocurrency as an investment vehicle.

The meme coin inspired by Shiba Inu, Dogecoin, experienced a significant spike following an endorsement from billionaire Elon Musk. During a public address at a Tesla manufacturing plant in Berlin, Musk hinted at the possibility of Dogecoin being accepted as a payment method for Tesla products. 

Adding to the week's highlights, MicroStrategy announced a $500 million note sale to purchase additional Bitcoin, reinforcing its position as the world's largest corporate holder of Bitcoin. This move is expected to increase MicroStrategy's holdings to over 210,000 coins, accounting for more than 1% of the total Bitcoin supply. This acquisition strategy underscores the growing corporate confidence in Bitcoin as a long-term investment.

Meanwhile, the Bitcoin mining sector reached a new milestone, with the difficulty of mining hitting a historical high of 83.95 trillion hashes. This increase in mining difficulty, occurring alongside the new price highs, reflects the competitive and robust nature of the mining ecosystem, especially as the community anticipates the upcoming Bitcoin halving event in April. The halving, which reduces the reward for mining new blocks, is widely regarded as a catalyst for price increases, adding another layer of anticipation and speculation in the market.

Ethereum’s Dencun Upgrade Goes Live

The Ethereum network marked a milestone with the successful deployment of the Dencun upgrade on its mainnet, which marked the most significant development since the merge. Going live at 1:55 pm UTC on March 13, Dencun represents a pivotal hard fork that aims to drastically enhance the scalability of the Ethereum network and reduce transaction fees, particularly for layer-2 (L2) networks. This upgrade is a follow-up to the Shanghai upgrade of April 2023, which first allowed network participants to unstake their Ether in the proof-of-stake system established by the Merge.

Dencun integrates nine Ethereum Improvement Proposals (EIPs), making it one of the most complex forks since the Merge, as Tim Beiko of the Ethereum Foundation noted. The upgrade is named after the combination of two significant improvements: the Cancun upgrade on Ethereum’s execution layer and the Deneb upgrade on its consensus layer. The Cancun component is designed to optimize transaction management and processing, while Deneb focuses on enhancing the consensus mechanism, which is crucial for network participants' agreement on the blockchain's state.
The impact of the Dencun upgrade has been immediate and profound, especially in Ethereum's layer-2 protocols, where transaction fees have plummeted by as much as 99%. Starknet, an Ethereum-based L2 solution, exemplifies the upgrade's success, with gas fees dropping to $0.04 from over $6, showcasing the upgrade's effectiveness in making Ethereum transactions more affordable and scalable. This series of upgrades, from Merge to Shanghai and now Dencun, illustrates Ethereum's ongoing commitment to improving its network infrastructure.

Crypto Initiatives and Regulations Across The Globe

In a series of developments highlighting the growing integration of cryptocurrencies into the global financial landscape, various regions are taking significant steps to embrace digital assets. South Africa is leading the charge in Africa by preparing to grant licenses to approximately 60 cryptocurrency platforms by the end of March 2024. This move comes in response to the rising demand for digital currencies and the urgent need for regulatory oversight following a series of high-profile crypto scams in the country. The Financial Sector Conduct Authority (FSCA) of South Africa is processing over 300 applications from crypto asset providers under the existing Financial Advisory and Intermediary Services (FAIS) Act, aiming to ensure the honesty, integrity, and competence of financial services providers.

Meanwhile, in Hong Kong, industry players are urging authorities to expedite the approval of spot bitcoin exchange-traded funds (ETFs) to avoid disadvantaging Asian investors. The push for swift approval reflects a broader ambition to enhance Hong Kong's status in the global cryptocurrency market, with considerations also being made to approve spot Ethereum ETFs. This initiative underscores the region's intent to position itself as a leading hub for cryptocurrency investments ahead of other major markets, including the U.S.