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Solana block production halts, validators confirm major outage

Solana block production halts, validators confirm major outage

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Hello Crypto Briefers!

The Solana network experienced another significant disruption yesterday, marking yet another hiccup in its operation. This incident, which caused a temporary halt in block production, brings to light persistent concerns regarding the network’s stability and scalability, factors crucial for its ambition to rival Ethereum as a leading platform for decentralized applications. The network has since restarted, and it looks like Solana’s native token has learned to shake off outages: the token barely budged in the five hours that the network was down.

The advent of Bitcoin Exchange Traded Funds (ETFs) in the United States has precipitated a record outflow of Bitcoin from miner reserves. Over $1 billion worth of Bitcoin was transferred to exchanges within just 48 hours following the ETF launches, illustrating miners’ strategy to capitalize on the market’s liquidity and the heightened interest in Bitcoin as an investment asset.

ARK Invest CEO Cathie Wood has highlighted a notable shift in investment preference from gold to Bitcoin, especially in the context of the recent launch of spot Bitcoin ETFs. Her insights reflect a growing institutional and investor confidence in Bitcoin, notwithstanding its volatility, as a more dynamic and potentially more rewarding store of value compared to traditional assets like gold.

Today’s Newsletter

  • Solana block production halts, validators confirm major outage
  • Bitcoin ETFs lead to record miner reserve BTC outflows
  • Bitcoin’s rise over gold to accelerate with spot ETFs, says Cathie Wood

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ECOSYSTEM

Solana block production halts, validators confirm major outage

The Solana blockchain came to a halt on February 6th, 2024 after a major outage prevented new block production for over 25 minutes. The failure marked Solana’s 11th incident interrupting services over the past two years, despite claims of unparalleled speed and reliability. Engineers identified the initial problem stemmed from an error in block propagation, a fix was coordinated among validators, and the network has since restarted.

Solana aims for fast transaction finality, yet the prolonged paralysis seemed to put the network’s resilience and reliability into question. Despite this, the ecosystem response showcases developer and validator coordination in striving to resolve deficits and limit user impacts. It looks like Solana’s native token has learned to shake off outages: the token barely budged in the five hours that the network was down. [cryptobriefing]

BITCOIN

Bitcoin ETFs lead to record miner reserve BTC outflows

The long-awaited launch of Bitcoin spot ETFs directly impacted miner behaviors, with over $1 billion worth of BTC flowing from miner wallets to exchanges in the first 48 hours of trading. Additional outflows continued in early February, marking multi-year record highs for the metric. Analysts suggest that miners need more operational liquidity, and capitalizing on positive sentiment may have been one of the strategies to adapt for this.

However, the report also found long-term BTC investors reluctant to sell at current prices based on significant supply dormancy over 1-2 year timeframes. The reactivation of older coins coincides with Grayscale share conversions to new ETF products, reflecting strategy shifts in response to the newly-regulated investment vehicles. While miner balances move exchanges, broader market holding remains stable – limiting panic selling risks but tightening available liquidity if outflows persist. [cointelegraph]

BITCOIN

Bitcoin’s rise over gold to accelerate with spot ETFs, says Cathie Wood

According to Cathie Wood, the accelerating shift from gold towards Bitcoin as the premier store-of-value asset will gain momentum thanks to newly launched spot BTC ETFs. Despite post-approval profit-taking causing a relatively negative price movement, Wood maintains that simpler access to these products will fuel Bitcoin’s rise over gold in investor portfolios.

Wood cites strong network fundamentals like 77% of supply unmoved in 155 days, indicating confident long-term holder conviction. Strong hands, yes. Wood also pointed to Bitcoin’s performance in response to the banking crisis in March 2023: compared to the regional bank index, Bitcoin acts more as a safe-haven asset. This means that investors are gradually seeing Bitcoin as a top-quality asset to to hedge against economic uncertainty. [cryptobriefing]

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