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ETH Merge Coming Sooner, BlackRock With First Direct BTC Investment Product: This Week’s Crypto Recap

The past week was particularly eventful, and that’s reflected in the overall performance. The total cryptocurrency market capitalization is up almost $100 million as most of the coins are well in the green. Let’s unpack.

Starting with Bitcoin, it’s up 5.2% over the week and is currently trading around $24,000. This time last week, the cryptocurrency was hovering around the $23K area, where it remained until Monday, when the price took off and reached $24K. The euphoria was short-lived, however, as the bears were quick to push BTC back below $23K on Wednesday. The correction was also for not as the price recovered rapidly above $24K and even pushed towards $25,000 yesterday.

The last move might have been propelled by an announcement that BlackRock – the world’s largest asset manager – is set to begin offering direct exposure to Bitcoin for institutional investors via a private BTC trust product. In any case, at the time of this writing, the price has withdrawn slightly below $24K.

Elsewhere, Ethereum’s ecosystem continues to flourish on the back of even more news about the Merge. Core ETH developers agreed that the event could happen even sooner than anticipated – on September 15th rather than September 19th, as was previously expected. The news came after the successful merge of Goerli – the final testnet before the Merge.

As a result, ETH is up a whopping 17% over the past week, trading at slightly below $1,900. It appears that it’s only a matter of time before the cryptocurrency tests the coveted $2,000 mark.

In light of the above, it’s also worth noting that the co-founder of MakerDAO, Rune Christensen, proposed to remove all the USDC from the DAI stablecoin peg stability module and buy ETH instead. That’s worth $3.5 billion. Vitalik Buterin argued that it’s a terrible idea.

Other cryptocurrencies also performed very well in the past seven days. Polkadot is up 14.2%, Avalanche is up 22.3%, LIDO is up 16.6%, and so forth. In any case, it remains very interesting to see how the industry will shape up during next week, as we’re moving closer to the Merge.

Market Data

Market Cap: $1,195B | 24H Vol: $86B | BTC Dominance: 38.3%

BTC: $23,833 (+5.2%) | ETH: $1,881 (+16.7%) | ADA: $0.53 (+5.3%)

12.08

This Week’s Crypto Headlines You Can’t Miss

Ethereum Merge Might Happen Sooner Than Expected. The long-anticipated transition of Ethereum from a proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS) could happen sooner than expected. The new date is set for September 15th, barring any unforeseen circumstances.

Cardano’s Vasil Hard Fork Explained: What to Expect from the Major Upgrade? Vasil represents a major protocol upgrade for Cardano, and it’s a highly-anticipated hard fork of the network. Here’s everything you need to know about it and when it might come to fruition.

MakerDAO Co-Founder Proposes Dumping $3.5 Billion USDC Reserves for ETH. Rune Christensen, the co-founder of MakerDao, recently proposed to remove all the USDC from the DAI stablecoin’s peg stability module. Instead, he suggests to used the USDC to buy ETH. Vitalik Buterin thinks this is a “terrible idea.”

BlackRock Makes Crypto Splash With Private Bitcoin Investment Trust Product. The world’s largest asset manager – BlackRock – is set to start offering direct exposure to Bitcoin for institutional investors. This will happen through a private BTC trust product and represents a major move from the company. The product is aimed at investors in the US.

Elon Musk Dumps 6.9 Million Tesla Shares Worth $7 Billion. The world’s richest man – Elon Musk – dumped 6.9 million Tesla shares worth some $7 billion. Interestingly enough, this transaction comes just a few months after Musk said that he wasn’t planning to do any additional sales.

Coinbase Reports Over $1 Billion in Losses During Q2. The leading US-based cryptocurrency exchange, Coinbase, reported over $1 billion in losses during the second quarter of 2022. Per the document, the trading volume declined by over 30%, leading to a loss in overall transaction revenue of around 35%.

Charts

This week we have a chart analysis of Ethereum, Binance Coin, Cardano, Solana, and Avalanche – click here for the complete price analysis.

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Bitcoin Calms at $24K as Ethereum Classic (ETC) Soars 10% Daily: Market Watch

The past 24 hours saw the cryptocurrency market calm down a bit, with no major changes happening across the top 10 coins by means of total capitalization. However, some cryptocurrencies performed better than others, so let’s dive in.

Bitcoin Calms at $24,000

After a serious run-up from $22,800 to almost $25,000 in the previous two days, Bitcoin’s price has finally calmed down and trades at around the $24K mark.

It appears that the volatility surrounding the announcement of July’s CPI numbers has passed, and now the market is in search of the next direction.

img1_btc_binance
Source: Binance via TradingView

That said, BTC failed to overcome the $25K level before retracing to where it currently trades, but overall – in the past 24 hours – it’s down some 2%.

Altcoins Flat, Red Prevails

Despite the relative calmness, it appears that the market is taking a breather from the recent rallies and is trading predominantly in the red.

img2_heatmap
Source: Quantify Crypto

As seen in the heatmap above, most of the cryptocurrencies are down slightly in the past day. The most obvious outlier is Ethereum Classic (ETC). It managed to increase by a whopping 10% in an otherwise boring market. It’s worth noting that this increase came on the back of more news associated with the Ethereum 2.0 merge, meaning that investors might be hedging against the possibility of a failure.

Other major gainers include Huobi Token (up 20%) and ANKR (up 40%). The latest soared after Binance Labs revealed a strategic investment in Ankr Protocol without disclosing the actual amount.

Meanwhile, the market sentiment continues to improve. According to the Cryptocurrency Fear & Greed Index, which currently sits at 42 basis points, the prevailing sentiment is still “fear.” However, this time last month, the index was at 15 basis points, meaning that the past 30 days saw meaningful improvement.

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Ethereum Merge Might Happen Sooner Than Expected

The Merge will mark Ethereum’s transition to a proof-of-stake consensus algorithm and is arguably the most significant event in the cryptocurrency industry for 2022.

As previously reported, the date for it was set for September 19th, but it appears that it might come sooner than expected.

  • During a call, core developers such as Terence Tsao – co-founder of Prysmatic Labs, and Tim Beiko, agreed that The Merge can take place when the Total Terminal Difficulty (TTD) hits 58750000000000000000000.
  • This might happen as soon as September 15th.
  • Tweeting on the matter was Terence Tsao, who said:

Tentative Miannet TTD -> 58750000000000000000000

Note: nothing is final until it’s in client release, so do expect changes last minute due to unforeseen circumstances.

  • Meanwhile, yesterday – on August 11th, at around 1:45 UTC time, Goerli – the last of the three public testnets transitioned to proof-of-stake successfully.
  • This takes the project a step closer to the long-anticipated mainnet upgrade, which might happen a bit earlier than expected.

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Ankr Receives a Strategic Investment from Binance Labs

Ankr is a well-known Web3 infrastructure provider. In a nutshell, the protocol works in the background, but it makes using decentralized applications, wallets, as well as crypto-based games possible by connecting them to the blockchains that they need to communicate with.

Known for its continuous support for the BNB Chain by introducing BNB Liquid Staking, as well as building some of its core infrastructures, including their Erigon upgrade, Ankr has now received a strategic investment from Binance’s VC arm – Binance Labs.

Binance Labs Invests in Ankr

According to a press release shared with CryptoPotato, Ankr has been the recipient of a strategic investment from Binance Labs. The specifics around the total amount invested remain undisclosed.

However, the proceeds will be used to double down on its RPC service while also building out its Web3 developer suite. This includes Liquid Staking DK, Web3 Gaming SDK, as well as Application Chains as a Service.

Per the release, the protocol is receiving more than seven billion blockchain requests per day across the 18 different blockchains that it hosts RPCs.

Speaking on the matter was Ryan Fang, the Chief Operating Office at Ankr, who said:

We are very excited to count Binance Labs as a strategic investor. BNB Chain is by far the chain with the highest number of daily transactions and active users. We are commited to support BNB Chain further scale, enhance BNB token utility by enabling DeFi composability using BNB Liquid Staking, and expand Binance Application Sidechain (BAS) ecosystem to enable innovative use cases requiring a highly scalable infrastructure, and other innovative infrastrcture services opening the gates to permissioned sidechains.

ANKR Token Staking Already Live

Binance’s investment in Ankr comes a couple of days after the protocol revealed that it had enabled token staking on its infrastructure level.

This allowed ANKR holders to stake their tokens to support nodes and earn rewards. CryptoPotato reported on how the rewards are distributed here. Back then, Greg Gompan, Chief Marketing Office at Ankr, said:

Today marks a monumental achievement for Ankr. One where we have moved from a centralized infrastructure provider to a truly decentralized protocol solution, where token holders can contribute and earn across the network with us. This puts Ankr in a class of its own, as not only one of the best technology companies in the industry but one of the best pure plays for aligning with multichain growth across Web3.

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BTC and ETH Spiked to New 60-Day Highs on US Inflation News (Market Watch)

The declining CPI numbers brought some positivity back to the crypto markets, as bitcoin spiked to almost $25,000.

The altcoins followed suit, and many, such as ETH, marked multi-month highs of their own. The crypto market cap is up by $70 billion in a day.

Bitcoin Neared $25K

After the relatively calm weekend, which bitcoin spent primarily around the $23,000 mark, the asset went on the offensive on Monday and jumped to the north of $24,000.

However, the bears came back to town almost immediately and didn’t allow any further increases. Just the opposite, BTC started retracing and dropped down to $22,700.

As anticipation was building up about the upcoming US CPI numbers for July, expected to be lower than the previous month, bitcoin reclaimed some ground and returned to $23,000.

The US indeed announced a lower inflation percentage of 8.5%, which was even less than the predicted one of 8.7%. Being a riskier asset, bitcoin reacted with an immediate price surge to $24,000.

More volatility came a bit later, and BTC jumped to just under $25,000, which became its highest price tag in almost two months. As of now, though, the cryptocurrency trades over $1,000 lower, but its market cap is still well above $450 billion.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

ETH Leads the Alts’ Rally

As it typically happens in cases of enhanced volatility, the alternative coins follow suit and even mark even more impressive price fluctuations.

Ethereum, for example, stood around $1,700 but soared by over $200. As a result, it tapped a multi-month high of its own at $1,920 (on Bitstamp). Despite retracing slightly since then, the second-largest crypto is still over 10% up on the day.

Solana is another double-digit gainer, and SOL has touched $45. Impressive price increases also come from Cardano, Polkadot, Avalanche, and MATIC.

BNB, Ripple, Dogecoin, and Shiba Inu are also in the green, although with more modest gains.

Most lower- and mid-cap alternative coins have charted notable increases as well. This means that the cumulative market cap of all crypto assets has added over $70 billion in a day and stands above $1.150 trillion.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto

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California’s DEPI Bans Celsius Securities Sales

California’s Department of Financial Protection and Innovation (DFPI) has now issued a desist and refrain order against Celsius. As such, the bankrupt crypto lender will not be to continue the sale and marketing of securities in the state of California.

The development comes a month after the DFPI slapped two cease and desist orders to other crypto lending platforms – BlockFi and Voyager – hammered by the contagion.

DEPI’s Allegation

The authorities have alleged that the “Earn Rewards” accounts offered and sold by Celsius are securities even as the department issued no such permit to authorize the activities. The DEPI also claimed that Celsius and its CEO Alexander Mashinsky failed to fully disclose material aspects of its business and Earn Rewards.

The order dated August 8th alleged that Mashinsky made “materially” misleading statements. It also pointed out that the exec continued to tout that the investors of Earn Rewards would be able to timely withdraw their investments and not suffer losses on their investments on multiple occasions leading up to the company’s suspension of customer wallets on June 12th.

The agency also found that Celsius offered accounts that allowed its users to earn interest on their deposited digital assets. It, however, did not qualify those accounts as securities in line with California law – Corporations Code Section 25110.

Celsius had paused customer withdrawals from the interest accounts on June 25th, following which, it went on to file for Chapter 11 bankruptcy a couple of weeks later.

Piling Legal Troubles

In addition to California’s DEPI, multiple state agencies are currently investigating the platform. Vermont’s Department of Financial Regulation (DFR), for one, also alleged that Celsius has been engaged in unregistered security offering to retail investors. The watchdogs also claimed that the firm is “deeply insolvent” with no assets and liquidity to honor its obligations to account holders and other creditors.

Former executives of Celsius had made bombshell claims that the company was mired in internal issues such as poor risk management, disorganization, and market manipulation.

Blockchain data also revealed that the wallet address associated with Mashinsky may have sold some of its CEL token holdings, which have added to Celsius’financial struggles.

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Crypto Markets Down $50B as Bitcoin Retraces to $23K (Market Watch)

Following a few days of price increases, bitcoin reversed its trajectory and fell to and below a familiar sight of $23,000.

Most altcoins are also in the red today, including ETH slumping beneath $1,700 after painting a multi-month high north of $1,800.

BTC Back Down to $23K

After the positive end of last month, bitcoin calmed and entered last weekend at around $23,000. The asset failed to produce any significant price movements in either direction in the next two days and remained around that mark.

More volatility, though, came at the start of the current week when bitcoin spiked to and beyond $24,000 to tap a multi-day high. However, that was short-lived and the bears returned to town.

They pushed the cryptocurrency south to just under $23,000 once more. As of now, however, bitcoin has regained some traction and stands at that familiar level but its market cap has declined below $450 billion.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

Bitcoin News

Despite recovering more than 30% since the mid-June drop to $17,500, Mike Novogratz is still uncertain whether BTC will be able to overcome $30,000 in the near-term future.

Amid the bitcoin and crypto bear market, Coinbase reported another quarter deep in the red with losses exceeding $1 billion.

Alts in Red Too

The alternative coins also marked local peaks in the past few days, including ETH, which jumped above $1,800 on hype in regards to the upcoming Merge. That was the asset’s highest price tag in approximately two months.

However, it failed to continue climbing and has dumped below $1,700 following a 5% daily decline.

Solana and Dogecoin are down by up to 6% in a day, while Ripple, Cardano, Shiba Inu, Polkadot, and MATIC have seen more modest declines.

The lower- and mid-cap alts are in no better shape, with APE, FLOW, FIL, and many others decreasing by up to 9-10% in a day.

As such, the crypto market cap has seen over $50 billion gone in the past two days and has returned below $1.1 trillion.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto

Industry News

Curve Finance became the latest DeFi protocol to be exploited, and the attacker managed to swipe nearly $600K in crypto.

A recent report claimed that the Merge has attracted institutional investors into ETH products as the positive inflows extended to a seventh consecutive week.

Speaking of the Merge, JPMorgan analysts claimed that it’s one of the two massive industry events that helped crypto stabilize in prices.

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U-Turn: Iran Imports $10 Million Worth of Goods in Crypto (Report)

One of the leading economies in the Middle East – Iran – reportedly made its first import order using digital assets. The initiative included goods worth $10 million and happened earlier this week.

  • A Reuters coverage revealed that Iran’s Ministry of Industry, Mine, and Trade approved the first official order for importing items in the country where the transactions were utilized by cryptocurrencies. Deputy Minister Alireza Peymanpak stated:

“This week, the first official import order registration worth 10 million dollars was successfully completed using cryptocurrency.”

  • The politician further assured that digital assets and smart contracts will be widely used in foreign trade in the following months.
  • Last year, the Central Bank of Iran (CBI) enabled banks, currency exchanges, and licensed miners to settle imports in cryptocurrencies.
  • Despite that, the Iranian authorities have not been so kind to the industry, and more particularly to the mining niche, in the recent past.
  • In the spring of 2021, the government banned all bitcoin mining operations for a period of four months to preserve the stability of its electricity network during the peak summer season.
  • A month later, law enforcement agents raided an abandoned factory in Tehran and confiscated 7,000 BTC mining machines.
  • In December last year, the Iranian government halted crypto mining operations again, citing electricity blackouts during the winter.
  • Earlier this year, the authorities alerted they might increase the sanctions on illegal BTC miners. Specifically, operators who use energy meant to reach businesses and households could go to prison.

“Any use of subsidized electricity, intended for households, industrial, agricultural, and commercial subscribers, for mining cryptocurrency is prohibited,” Mohammad Bohlouli – a Tavanir executive – said.

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Ethereum Merge Attracts Institutional Investors: Report

The timing of the Merge has been the bone of contention for the Ethereum ecosystem. Developers expect it around September 19, even as the timeline is not concrete. But, with the details before the final testing phase of the event revealed, derivative trades have flipped bullish.

CoinShares Head of Research James Butterfill, for one, believes there has been a change in investor sentiment. In the latest edition of Digital Asset Fund Flows Weekly Report, the exec credited the “turn-around” in investor sentiment to “greater clarity” on the timing of the Merge.

Greater Clarity

The report highlighted that institutional investors are stacking up their bets on investment products based on Ethereum. In fact, they witnessed inflows totaling $16 million leading to a seven consecutive week run of inflows totaling $159 million.

Institutions are pouring in the capital as sentiment around the world’s second-largest crypto asset sees a positive reversal which could spur further buying behavior.

The report stated,

“Ethereum saw inflows totaling US$16m and is enjoying a near 7 consecutive week run of inflows totaling US$159m. We believe this turn-around in investor sentiment is due to greater clarity on the timing of The Merge where Ethereum shifts from proof-of-work to proof-of-stake.”

Ethereum Merge is Coming

The Merge aims to eliminate the energy-intensive mining process while simultaneously securing the Ethereum network with the help of staked ETH. After months of delays, the Ethereum mainnet will merge with the Ethereum 2.0 Beacon Chain to finally complete the transition from Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS).

The Ethereum 2.0 will have enhanced network efficiency, and security, in addition to drastically reducing carbon footprint by reducing energy consumption by over 99%, something that its predecessor was heavily criticized for.

Ethereum proponents have some reason to celebrate, but the ride has not been an easy one. From changing roadmaps, confusing terminology, and the latest being opposition to the transition itself, the community has seen it all. Its founder, Vitalik Buterin has been vehemently calling out any potential hard fork paving the way for another blockchain with a PoW mechanism.

But many influential figures in the space appear to support a hard fork. Tron founder, Justin Sun earlier revealed that his exchange Poloniex would list both ETHw and ETHs tokens. BitMEX also joined the list of growing supporters after it announced launching margin trading options in case of an ETHPoW fork.

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Crypto Prices Found a Floor Because of Ethereum’s Merge, JPM Says

According to the multinational investment bank – JPMorgan Chase & Co. – the main reason for the recent recovery of the cryptocurrency market is the expectation that Ethereum will complete its shift from Proof-of-Work to Proof-of-Stake this year.

Bitcoin is currently up by over 35% compared to its lowest level in June, while Ether has soared by 95%. The total market capitalization back then was around $880 billion, while at the moment of this writing, it’s north of $1.16 trillion.

The Merge Is the ‘Real Driver’

Analysts at JPMorgan believe that the breath of fresh air in the crypto industry has been fueled by two reasons. First, the sector managed to restrict the contagion of failing projects like Terra. In May, the algorithmic stablecoin of the protocol – UST – depegged and slipped way below the target of $1.

The panic caused many investors to sell their UST reserves while Terra’s team started minting more LUNA (the other native token of the project) to cease the freefall. This, however, increased the supply, and the latter’s valuation crashed, too.

Other cryptocurrency-related firms that were negatively affected in the past few months include Three Arrows Capital, Celsius, BlockFi, and others.

The second factor which created some kind of stability in the industry is Ethereum’s Merge, which should occur later in 2022. The analysts think the latest developments around the process have brought back investors’ confidence. The possible transition toward PoS has also created a “floor bottom” for the digital asset prices, while the experts believe the worst of the bear market is over.

“However, we think the real driver has been the Ethereum Merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the merge is viable in 2022.”

At the end of July, Vitalik Buterin – Co-Founder of Ethereum – assured that the Merge testing is 90% complete. Once the shift comes to an end, the blockchain protocol “will be able to process 100,000 transactions per second” compared to the current 15-20, he outlined.

The Merge Could be a Double-Edged Sword

While numerous experts point out the positive outcomes of Ethereum’s shift towards PoS, Mark Cuban warned it could have its downsides. For one, the process could turn out to be a “buy the rumor, sell the news” event, meaning that ETH’s price would go up prior to the Merge prompted by the investors’ enthusiasm, but eventually, it would halt the uptrend and even collapse.

It is worth noting that the move has been delayed numerous times in the past, and it is yet to be seen whether it will actually occur by the end of this year. Assuming it does, it will be the first cryptocurrency protocol to change its consensus algorithm. As such, it can’t be compared to similar past events, meaning that time will show what the aftermath will be.

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