Kalam Crypto #72: Bitcoin Fees Surging & More U.S. Bank Failures

“Nobody knows how far you can go with a paper currency before it gets out of control, particularly if you are the world's reserve currency.” Warren Buffett (May 2023)

Ahlan wa sahlan, and welcome to the 72nd edition of CoinMENA's weekly newsletter, Kalam Crypto. This week, bitcoin fees and block space demand are surging, and the number of non-zero BTC addresses reaches a new all-time high, and more U.S. bank failures. All that and more, so let's dive into this week's letter, and talk crypto:

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Global News 🌍

Banking Crises Continues: First Republic Bank (FRB) became the second largest bank failure in U.S. history last week. The bank and its ~$220 billion dollars in assets were seized by the Federal Deposit Insurance Corporation (FDIC) and then auctioned off to JP Morgan. FRB is suffering from similar issues to Silicon Valley Bank which failed back in March. Sitting on unrealized losses from buying long-duration U.S. government bonds whose value has plummeted due to rising interest rates. Regional banks deposits fell by approximately $12.5 billion last week driven by fears that deposits above $250 thousand are not insured. Therefore depositors are fleeing to the “too big to fail” banks like JP Morgan who was able to acquire First Republic Bank, despite the rule against one bank controlling more than 10% of US deposits. JP Morgan now holds more than $2.4 Trillion in deposits.

In the past 60 days, 5 banks have collapsed: Silicon Valley Bank, Silvergate Bank, Signature Bank, Credit Suisse, and now, First Republic Bank.

Keep an eye on 👀

Bitcoin fees surging: Bitcoin block 788695 contained transaction fees greater than the block subsidy: 6.7 BTC transaction fees + 6.25 BTC subsidy. This is the first time in history this has ever occurred. Over the past 24 hours, transaction fees accounted for 22.8% of minor revenue, an all-time high. The increase is due to the increased demand for block space from ordinal inscriptions and BRC-20 tokens. Similar to Ordinals, BRC-20 tokens are a new type of asset on the Bitcoin network that allow users to mint and trade tokens by inscribing data onto satoshis. The market capitalization of BRC-20 tokens has exploded in the past month, reaching $120 million with a 600% rise in the past week. The congestion and higher fees on the Bitcoin base layer will likely accelerate the adoption of the lightning network, Bitcoin’s layer 2. Wondering what bitcoin Ordinals are? Check out Kalam Crypto 60 here. 

Lightning Round ⚡️

Argentina bans Bitcoin: Argentina, suffering from an inflation rate of over 100%, just banned financial institutions from buying Bitcoin. Bitcoin price is currently at an all-time high in Argentinian Pesos. As Michael Saylor said “Bitcoin while you can, not when you must”

Visa’s stablecoin plans: Visa's upcoming crypto product is intended to encourage the broad adoption of public blockchain networks and stablecoin transactions among the general public.

El Salvador eliminates taxes on tech innovation: The first country to make bitcoin legal tender just announced a law that eliminates all taxes (income, property, capital gains, and import tariffs) on technology innovations, software and app programming, AI, and computer, and communications hardware manufacturing.

Presidential candidate for Bitcoin: U.S. presidential candidate Robert F. Kennedy Jr. has come out in favor of Bitcoin saying it's a major innovation engine and believes it's a mistake for the U.S. to hobble the industry.

Signal beyond the noise 🔊

Bitcoin addresses reach new all-time high: The number of non-zero bitcoin wallet addresses reached an all-time high of 46.1 million addresses.

Tweet Of The Week 🐥

CoinMENA News 🗞

1 ETH Giveaway/4 winners: Join the CoinMENA Trading Competition now and trade your way to 1 ETH 🏅! To participate, all you have to do is place 1 trade this month for a minimum of $10, that’s it!

Quiz Corner ✅ 

Last week’s question:  When will the last bitcoin be mined?

Answer:  2140

This week’s question: What is the minimum amount of ETH you have to stake to become a validator?

A. 32 ETH

B. 16 ETH

C. 8 ETH

D. No minimum

See the answer in next week’s newsletter. Or check out our new learning platform https://university.coinmena.com/