During the East Asian trading day, Bitcoin slid 2.6% to $27,715 and Ether dropped 1.4% to $1,850. Due to the Bitcoin network’s congestion, Binance had to stop withdrawals twice during the course of the weekend, creating what many experts in the field believe to be an unprecedented circumstance.
Co-founder and CEO of 21Co Hany Rashwan spoke on CoinDesk TV about his worries about the condition of Bitcoin at the moment. He said that the BRC-20 meme coins were to blame for the bottleneck, but he added that these coins shouldn’t be confused with other cryptocurrencies like Ethereum or Solana. Rashwan claims that altcoins are platforms for smart contracts that enable a variety of operations, including but not limited to meme currencies and NFTs.
Rashwan recommended that meme currency holders remove their earnings and switch to altcoins and Ethereum to alleviate the congestion issue. The value of those coins may rise as a consequence of this transition, but it would need a significant macroeconomic event to spark the change. Bitcoin owners are saddled with Bitcoin NFTs of PEPE in the meantime.
However, Paul Eisma, head of trading at XBTO Group, said on Monday’s episode of CoinDesk’s “All About Bitcoin” program that Bitcoin’s drop and the congestion on Binance caused by meme pools are just “growing pains.” Eisma voiced confidence in the long-term viability of Bitcoin, the biggest cryptocurrency by market capitalization. He connected the most recent technical issues to the late 2021 Taproot update, which among other things enhanced the anonymity of the Bitcoin network.
Eisma agreed that for the most of this year, Bitcoin has traded in a region approximately between $25,000 and $30,000. He said that since crypto is still in its infancy, it is vulnerable to the same challenges that have beset other emerging technologies throughout history. The publication of the May Consumer Price Index (CPI) on Wednesday, according to Eisma, might provide light on the US central bank’s next privacy initiative.
According to Eisma, he will be keeping an eye on the CPI announcement to get a sense of the Federal Reserve’s next privacy action. The Federal Reserve has increased interest rates by 25 basis points (bps) three times in a row, but monetary policy watchers are optimistic that the bank’s hawkishness would end. Eisma noted that it is still too early to stop rate reductions, but he issued a warning that the current inflation rate is still higher than the target level of 2% set by the Fed. Powell has made it apparent that he intends to maintain rates at this level for a longer period of time than the market is suggesting.